Astellas Pharma GmbH

München

Befreiender Konzernabschluss zum Geschäftsjahr vom 01.04.2022 bis zum 31.03.2023

ASTELLAS B.V.

Leiden/Niederlande

Contents

DIRECTORS' REPORT

CONSOLIDATED BALANCE SHEET

CONSOLIDATED PROFIT AND LOSS ACCOUNT

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

NOTES TO THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

COMPANY BALANCE SHEET

COMPANY PROFIT AND LOSS ACCOUNT

NOTES TO THE COMPANY BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

OTHER INFORMATION

INDEPENDENT AUDITOR'S REPORT

DIRECTORS REPORT

General

Astellas B.V. and its subsidiaries form part of the world-wide group of Astellas companies, headed by Astellas Pharma Inc. in Tokyo, Japan. Astellas' raison d'etre is to "contribute toward improving the health of people around the world through the provision of innovative and reliable pharmaceutical products." Based on this, we aim to "be on the forefront of healthcare change to turn innovative science into value for patients". This is Astellas' VISION.

Astellas B.V. and its subsidiaries in Europe, Middle East and Africa contribute to the corporate governance framework as set by Astellas Pharma Inc. Astellas B.V. is the EMEA holding company with Astellas Pharma Europe Ltd being the regional HQ for operations. For an overview of the subsidiaries we refer to section 6.3 of the financial statements.

Since the Astellas organization is aligned on a global functional basis, the organizational chart and other information can be obtained from the annual accounts and other information published on the Group's website www.astellas.com.

The main activities of Astellas B.V. and its subsidiaries in Europe, Middle East and Africa relate to the development, the manufacturing and the marketing and sales of ethical pharmaceutical products. Intellectual Property (IP) rights are used to support these activities. The R&D & Manufacturing bases are based in Netherlands & Ireland, with sales bases across the wider EMEA region.

In May 2021 the Corporate Strategic Plan 2021 ("CSP2021") was announced. This five year plan sets three types of goals: Strategic Goals as signposts towards the realization of our VISION; Organizational Health Goals to build a workplace where innovation and exceptional execution are cultivated and sustained and Performance Goals that represent the subsequent enhancement of Astellas corporate value achieved through all of its activities. By constantly striving towards these three types of goals, designed to guide and maintain an appropriate balance in our efforts, Astellas will make the right judgements to maximize its value to society.

Strategic Goals

In the announced Corporate Strategic Plan 2021 the company set four strategic goals with the intention of evolving and developing each strategic goal.

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To address Strategic Goal 1 "Enable patients to achieve better outcomes," Astellas is committed to maximize patient access to our products and to partner effectively with healthcare stakeholders to secure the realization of VALUE. To achieve this, we strive to accelerate submission of New Drug Applications (NDAs), reducing the time to achieve broad geographic coverage, implementing sophisticated launch plans and prioritizing our efforts across the portfolio towards where the VALUE opportunity is greatest.

Major Initiatives and Accomplishments so far (global basis)

•	Although the ambitious full-year forecast was not achieved, sales of XTANDI and strategic products increased 17% year on year on a global basis
•	Fezolinetant received Marketing Authorization Application approval in Europe in September 2022.
•	Xtandi obtained top-line results from a Phase 3 EMBARK study for an additional indication (MO CSPC).
•	Zolbetuximab obtained top-line results from Phase 3 SPOTLIGHT and GLOW studies in Nov 2022 and Dec 2022, respectively.
•	Reorganization of commercial functions in order to centralize and standardize functions globally and build stronger capabilities

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For the achievement of Strategic Goal 2 "Translate innovative science into proven VALUE," Astellas enhances its pipeline value by giving priority to the investment of management resources into its Primary Focuses. Through acceleration of the demonstration of VALUE, the growth of Primary Focuses, and the effective exploration of cutting-edge biopharmaceutical innovation, we aim to take our efforts of CSP2018 to the next level. Astellas is working on researching and developing life-changing therapies through priority investment in Primary Focuses selected based on the Focus Area Approach. We believe that the innovative treatments we are developing will enable a paradigm shift from symptomatic to curative therapies, bringing great hope to patients desperate for new therapies that will treat previously unbeatable diseases. We will continue our best effort to develop innovative medicines from our Focus Area Approach in FY2023.

Major Initiatives and Accomplishments so far (global basis)

•	Achieved 9 candidate nomination decisions in research for clinical development
•	4 projects entered the clinical development phase with new modalities/technologies such as bispecific immune cell engager and protein degrader
•	Reformed the research organization to be agile and accelerate innovation

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For Strategic Goal 3 "Advance the Rx+® business," Astellas aims to commercialize multiple projects during the CSP2021 period. Our main areas of progress in the Rx+ business included the initiation of a sales pilot of Fit-eNce Home, commercialization of AI- based MYHOLTER II ECG analysis service, a business alliance to initiate a sales pilot of disposable Holter ECG device "EG Holter", and the topline results from the Phase II trial of the imaging agent pudexacianinium chloride (ASP5354) used to visualize the ureters.

Major Initiatives and Accomplishments so far (global basis)

•	Initiation of pilot marketing Digital health services (My Holter II, ECG analysis service using AI)
•	Drug-device combination: based on the good results obtained in the Phase II study of ASP5354, preparations are being made for conducting the Phase III study.

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For Strategic Goal 4 "Deepen our engagement to sustainability", Astellas is committed to our mission of sustainable enhancement of enterprise value in alignment with our raison d'être, "To contribute toward improving the health of people around the world through the provision of innovative and reliable pharmaceutical products." In other words, for Astellas, contributing to societal sustainability means the execution of our business philosophy. While leveraging our strengths and capabilities, we will deliver VALUE to society by creating innovative healthcare solutions that improve access to health and outcomes for patients. We believe that our innovations will play a part in improving the sustainability of society. This will build trust from society, which will, in turn, also make Astellas more sustainable. In FY2021, Astellas has updated our Materiality Matrix to guide our sustainability efforts, selecting key issues from the perspective of importance for society and Astellas. We then prioritized the material issues (materiality) and will formulate action plans for each materiality identified, which will contribute to the improvement of sustainability through company-wide efforts.

Major Initiatives and Accomplishments so far (global basis)

•	Updated our materiality matrix and reidentified 19 key issues including 9 material issues (Materiality)
•	Developed and disclosed Access to Medicines strategy, and selected 4 programs for the health system strengthening
•	Scenario analysis was conducted for disclosure based on TCFD recommendations. In 2021, a qualitative analysis was conducted and published
•	Strengthened in advocacy of our efforts on sustainability (e.g., conducted sustainability meeting for the investor community, named in the FTSE4Good Index Series for 11 consecutive years).

By firmly committing to these Strategic Goals, we will make steady progress towards the realization of our VISION.

Corporate Strategic Plan 2021

Establishment of Three Organizational Health Goals

Organizational Health Goals (OHGs) have been established to implement CSP2021 more effectively. They are important for the reliable execution of CSP2021 and for the personal growth of individual employees to foster a corporate culture enabling the creation of greater innovation to reach more ambitious goals.

In order to increase our time and resources to focus on critical work, advance necessary activities faster and be more innovative, we started the "Dansharism" initiative from FY2022. Based on the idea that time is the most valuable resource, by identifying and being "brave" to eliminate work that lacks sufficient purpose reason, and identifiable return on investment (ROI), we secure resources for our priority core business and also drive further innovation.

The first Operational Health Goal (OHG) is "Unlock Innovation". To achieve this, we need a corporate culture that encourages taking on challenges without fear of failures. We need a psychologically safe environment that allows for learning from intelligent failures. We created and launched a psychological safety playbook with actual use cases in several divisions. Both divisions and individual employees set ambitious objectives from FY2022 to achieve higher goals and training was provided for that globally. The Dansharism initiative was introduced in FY2022 given the fact that a redesigned employee engagement survey revealed a need for white space. The white space toolkit was also launched for managers in response to that results to create better environment to pursue OHG1.

The second OHG is "Talent and leadership thrives". We are actively carrying out training to change the mindset and style of employees in leadership positions, who are key to enabling our people to thrive in their work. We have newly set 12 Astellas Leadership Expectations with a specific focus on empowering ownership, delegating decision making to the right level and providing frequent feedback, then completed the so-called "IGNITE" leadership training for all Astellas leaders (approx. 3,000 people globally). Through IGNITE and also newly initiated Astellas leader forums we are working on activating continuous feedback. This ultimately leads to an innovative and high- performance culture. We are also actively engaging in multiple talent development initiatives including a female talent development program and enhanced succession planning and talent review process from FY2022.

The third OHG is "Strengthen Collaboration". A shared objectives process was introduced which promoted dialogue and collaboration between divisions on initiatives in support of CSP2021. Up to 100 shared objectives identified, along with key contributors and success measures. For FY2022, STI (short-term incentive) and LTI (long-term incentive) rewards for employees: we removed division performance measures and replaced them with All Astellas Performance to incentivize greater collaboration and non-siloed work. We undertook measures to disseminate CSP2021 and OHG throughout the organization and increased direct dialogue and Q&A opportunities with Top Management such as "Ask Me Anything" sessions. Also, the first ever global online Top Management live stream to all Astellas employees was held in May 2022 including the entire Top Management team focused on role modelling and collaboration.

FY2025 Performance Goals

Realize sustainable growth by steadily implementing the following three goals at a global level.

1.	Revenue: XTANDI and Strategic products sales > EUR 9.2bn in FY2025
2.	Pipeline Value: Focus Area projects expected sales ≥ EUR 3.8bn in FY2030
3.	Core Operating Profit Margin: ≥ 30% in FY2025.

By achieving these three Performance Goals, we aim to become a global company with a market capitalization valued at more than EUR 54 billion in fiscal 2025. For the EMEA region, no specific performance goals are set in the CSP2021.

HR Vision

To realize our VISION, the engagement of "talent" who are working in Astellas is essential. Investment in our people is important for the future of Astellas, in addition to enhancing our current ability for execution. We continue to invest with both short-term and long-term perspectives. We want our employees to feel empowered to shape the future of our organization. To that end, we are building a workplace where diverse teams and individuals can thrive amid a culture of mutual learning and respect. We are committed to creating an environment where all our employees can become peak performers at their jobs and stay both physically and mentally healthy.

In 2016, Astellas has developed HR VISION based on Astellas Way to clarify our desired people and organization. By optimizing 3 key areas: attraction, retention and development, Astellas aims to be an "Employer of Choice" . In addition, we newly established "Organizational Health Goals (OHGs)" in CSP2021 by identifying the elements necessary to achieve CSP2021. With our effort to achieve OHGs, we nurture a corporate culture that aims at reaching ambitious goals by promoting innovation, optimizing our talent, and fostering collaboration, which enhance Astellas ' ability for execution.

Overview of the HR Vision

Initiatives for People and Organization

The following HR measures support Astellas' business and strengthen its competitiveness in recruiting talent:

Astellas Leadership Expectations

A newly defined Astellas Leadership Expectations guide all leaders and people managers to achieve the Organizational Health Goals set out in the CSP2021. We conduct trainings for all people managers across Astellas, including Top Management, to practice leaders' behaviour in order to create a healthy work environment.

Harmonization of grade structure and job evaluation

We established a common global grade system for consistent people and organizational management. Positions above a certain grade are subject to job evaluation by globally common methodology and process to aim for consistency in grade based on each position's responsibility regardless of where they work or which division they belong to.

Harmonization of compensation structures and levels

We completed a common global compensation structure for Vice President above through Top Management and proceeds gradual reduction of the disparity in compensation levels between regions.

Global employee database

By integrating different employee data platforms in each region, we have established a database that will serve as a foundation of talent management by visualizing all talent data worldwide, regardless of where employees and their managers are located.

Succession planning

Utilizing a system based on the global employee database, we established a global consistent and integrated approach to talent reviews and succession planning for positions above a certain grade. Our global approach includes succession planning for Vice President levels. Through our approach we discuss and identify top talents, create succession plans to ensure we have a pipeline of talent, and discuss and agree the development of our top talent to retain, and prepare, them for their target roles.

Internal job posting system

Employees can search and apply for internal positions around the world through our global job posting system. This system enables our employees to work globally according to their skills, abilities and career aspirations.

Global Mobility

With globally common Global Mobility Policy, we ensure the fairness and consistency for cross- border assignments, which contributes to the realization of "right person in right position" globally.

Flattened the hierarchy

Led by the CEO, Astellas is promoting measures to become an innovative organization that does not become political even with a large number of people.

We aim to transform the organization into an organization that is more likely to generate innovation. To that, we are focusing on the equity ratio, management span, and organizational fitness level, and are working on reshaping the HR system.

As for equity ratio, we changed the calculation method for bonuses to be based on company-wide indicators. As a result, "VALUE" that Astellas creates will be more directly linked to the rewards for individuals, and the balance will shift to an organization that focuses on innovation and results rather than politics.

At Astellas, management span is viewed as span of control, which represents the number of direct reports to each leader. By increasing this management span, we aim to make our organization flatter and to make it maximum of 6 layers to speed up decision-making. In addition, we need leaders who can appropriately pick up innovative ideas that would arise in the flatter organization and can support the growth of their subordinates at the same time. We have clarified the leadership image that Astellas is aiming for under the OHG and promoting the development of leaders through leadership training.

At Astellas, organizational fitness level refers to the right person in the right place, including timing, not seniority. In order to find the best talent for a certain position from all over the world, we have built a global HR system so that we can search for the right talent globally. In addition, we have established and operate a global job posting system that allows employees from all over the world to apply for desired posts.

We believe that both reforming the organization structure and working to foster a culture of taking on challenges without fear of failure, it will accelerate the development of innovative medical solutions and lead to the realization of VISION.

Risk Management

Regulations and other Systems regarding Risk (Risk of Loss) Management

In order to conduct risk management properly as a whole group, the Company has categorized the risks into "risks relating to strategic management decision-making (risks relating to business opportunities)" and "risks relating to appropriate and efficient business conduct (risks relating to the performance of business activities). " Each division and unit of the Company and the Astellas Group companies will proactively put the Company's risk management initiatives into practice and promote risk mitigation within the Group and the proper response to such risks through the following activities:

•	With respect to measures dealing with risks relating to business opportunities, each responsible division and unit will implement appropriate measures to mitigate risks within their respective scope of responsibility and roles according to internal processes and policies for decision making. Among these risks, matters concerning material risks will be decided upon deliberation by the Executive Committee and/or the Board of Directors depending on the level of materiality.
•	With respect to measures dealing with risks relating to the performance of business activities, the Company has established " Global " and " Divisional " Risk and Resilience Management Committees to manage comprehensively 1) identification and optimal management activities of risks, and 2) preparedness and status of crisis response plan and business continuity plan. Policies relating to such system will be decided upon deliberation by the Executive Committee and the Board of Directors. Significant risks identified under the system and responses to them will be decided upon deliberation by the Executive Committee and reported to the Board of Directors.
•	In order to enhance the effectiveness of risk management operations, the Company will formulate separate policies and manuals for matters such as disaster control, information security, and personal information protection based on the nature of these risks.

Identifying and Mitigating Risks Relating to the Performance of Business activities.

Pharmaceutical companies that expand their business globally are expected to follow various regulations with a high level of compliance. Accordingly, Astellas must also address various risks that could impact its business results and reputation. In FY2019, Astellas pursued its operation of enterprise risk management with the aim of further developing the risk management activities implemented until now. This involved newly establishing the Corporate Risk Management Division to take control over risk management, and the Global Risk and Resilience Management Committee, chaired by the Chief Administrative Officer and Chief Ethics & Compliance Officer.

Under enterprise risk management, risks are identified on the Group-wide level and on the individual division level. Those risks are classified using a uniform evaluation process according to priority and, if deemed necessary, linked to formulation of a universal means for solution. Identified risks are regularly evaluated by the Global Risk and Resilience Management Committee, and solutions and mitigation measures for high priority risks are discussed at the Executive Committee, chaired by the Representative Director, President and CEO.

Risk Management Framework

Critical Risks

The risks identified by global management as having the potential to have a considerable impact on financial position, business results, and cash flow position of the consolidated companies are mainly set forth below. For the current financial year, the outlined risks have not materialized or have been sufficiently managed, so not to have any material impact on the results and on the internal control framework.

1. Risks related to cybersecurity

In recent years, the technology involved in cyberattacks is advancing at an unprecedented level and the methods of attack are growing more diverse and sophisticated. In light of this environment, Astellas has identified risks related to cybersecurity as one of its critical risks. The Information Systems Division is leading the response to this risk, implementing various countermeasures against cyberattack on a global basis that includes monitoring of networks and facilities, and taking every precaution to manage the risk.

However, despite having such measures in place, in the event that business is substantially interrupted due to a cyberattack or serious system failure, etc., caused by a cyberattack, or in the event that important data, including information that could identify individuals, is lost, corrupted, or leaked externally, the Astellas Group's business results, including the Company's results, may be significantly affected.

2. Risks related to supply chain management

In the pharmaceuticals business, the ability to manufacture safe and effective pharmaceuticals reliably and then to provide their stable supply is extremely important. Astellas has identified risks related to supply chain management as one of its critical risks. The Pharmaceutical Technology Division is leading the response to this risk, establishing its own standards compliant with industry standard Good Manufacturing Practice (GMP), including manufacturing and quality controls, and Good Distribution Practice (GDP) as well as rigorously implementing consistent, high-level quality control for not only manufacturing facilities and equipment but inclusive of all operations from ingredient procurement to storage, manufacturing, and delivery. Furthermore, to respond to growing complexities in the supply chain, the Group has introduced on a global basis, management of its Contract Manufacturing Organizations (CMO) and is proceeding with measures including the creation of Business Continuity Plans (BCP) to ensure supply during emergency situations. However, despite having such measures in place, in the event that interruptions in supply, product shortage, or quality problems arise, or in the event that the reputation of Astellas is damaged as a result of the aforementioned, the Astellas Group's business results, including the Company's results, may be significantly affected.

3. Risk of impact from pharmaceutical regulators

The ethical pharmaceutical business is governed by a wide variety of regulations in each country. The Astellas Group's business results may be significantly affected by policy for controlling the cost of medical treatment or a tightening of various regulations concerning development, manufacturing, and distribution.

In addition to the above critical risks identified by the Astellas Group, there are many other risks. Some risks are unique to the pharmaceuticals business, which include the uncertain nature of research and development, the risk of being infringed upon or infringing intellectual property rights, the risk of drug side effects or safety issues arising thereof, and the risk of an Astellas Group business's partial dependence on licensing and sales of third party developed drugs. Other risks include the risk of infringement of related laws and regulations concerning competition with rival products, or environment or health and safety, or of commercial litigation regarding business processes, as well as risks of delays or stoppages in manufacturing due to a natural disaster, etc., or of exchange rate fluctuation. Such risks may affect the Astellas Group's business results, including the Company's results, and financial position.

Further information can be gained from the Group annual accounts and other information published on the Group's website www.astellas.com.

Risk Appetite

For the main risks identified, we take risk appetite, the likelihood of these risks materialising and the potential impact of these risks into account. Where the impact level as well as the likelihood of occurrence is classified as 'high', this risk is by default considered a high risk and needs proper management attention to mitigate this risk to an acceptable level. The impact level is assessed with regards to the areas of finance, operations, reputation, environment, health & safety, legal and regulatory. The likelihood of occurrence is view of the likely timescale of the occurrence as well as the probability of the occurrence.

Generally, there is a relationship between probability of a scenario and the control level. These control levels are regularly assessed in order to assist management to focus on risks that require improvement and remediation from a system, process and resilience perspective based on existing detective or preventative controls in place. Currently there are no major changes foreseen regarding the Risk Management system.

Risk appetite gives an indication of the risk approach of management in reference to certain risk areas. As for "compliance", this indicates any related risks where the Group's management does not accept any tolerance. As for the risks areas categorised as "strategic", higher tolerance is accepted because these will also be areas where opportunities or unique selling points will may be embraced.

The main areas of assessment of risk appetite are:

•	Strategic: we take strategic risks in pursuit of sustainable growth of enterprise value.
•	Operational: we take a balanced approach to operational risk, meaning that we consider both the risk and the reward in taking business decisions.
•	Compliance: we consider adherence to laws and regulations to be fundamental in enabling us to provide our clients with exceptional outcomes. Compliance is strongly embedded in the culture of the company. We take a zero-tolerance approach to breaches of compliance.
•	Financing & Reporting: The Group is exposed to financial risks such as credit risks, liquidity risks and foreign exchange risks in operating businesses, and it manages risks based on its policy to mitigate them. The Group limits the use of derivatives to transactions for the purpose of hedging financial risks and does not use derivatives for speculation purposes.
•	Business risk: The pharmaceutical industry operates in a highly competitive environment characterized by rapid technological innovation. The Astellas Group faces fierce competition from drug makers and generics manufacturers. The launch of competitive products by rivals could impact the Astellas Group's business results significantly.

Regulations and other Systems regarding Risk (Risk of Loss) Management

In order to conduct risk management properly as a whole group, the Company has categorized the risks into "risks relating to strategic management decision-making (risks relating to business opportunities)" and "risks relating to appropriate and efficient business conduct (risks relating to the performance of business activities)." Each division and unit of the Company and the Astellas Group companies will proactively put the Company's risk management initiatives into practice and promote risk mitigation within the Group and the proper response to such risks through the following activities:

•	With respect to measures dealing with risks relating to business opportunities, each responsible division and unit will implement appropriate measures to mitigate risks within their respective scope of responsibility and roles according to internal processes and policies for decision making. Among these risks, matters concerning material risks will be decided upon deliberation by the Executive Committee and/or the Board of Directors depending on the level of materiality.
•	With respect to measures dealing with risks relating to the performance of business activities, the Company has established "Global" and "Divisional" Risk and Resilience Management Committees to manage comprehensively 1) identification and optimal management activities of risks, and 2) preparedness and status of crisis response plan and business continuity plan. Policies relating to such system will be decided upon deliberation by the Executive Committee and the Board of Directors. Significant risks identified under the system and responses to them will be decided upon deliberation by the Executive Committee and reported to the Board of Directors.
•	In order to enhance the effectiveness of risk management operations, the Company will formulate separate policies and manuals for matters such as disaster control, information security, and personal information protection based on the nature of these risks.

For each of the mentioned risks, the Company has insurances, business policies and organizational structures and mechanisms to manage these risks yet understanding that compliance with the relevant rules and regulations (and with a high sense of ethics) is of utmost importance to Astellas.

Financial Risks assessment

Foreign exchange risk

Foreign exchange rate fluctuations: the business results and financial position are subject to the impact of exchange rate fluctuations due to the extensive international operations. For the EMEA region, the Group mainly operates in the European Union. The associated currency risk for the Group largely concerns positions and future transactions in US dollars, British pounds, Japanese yen and Russian roubles. The Global Treasury Committee reviews regularly the associated risks in terms of foreign exchange rate fluctuations and determines if financial instruments should be used in order to mitigate these risks.

Credit risk

The group has debtors in certain geographical regions which have economic and political instability. As a result, the group has credit risks on its customer receivables and provisions for doubtful debts are recognized based on management assessment. There are no concentrations of credit with a single customer which carries an unusually high credit risk.

The Company has issued loans to its shareholder and other affiliated companies. These counterparties do not have a history of non-performance.

The Company has implemented a counterparty credit risk policy in its treasury framework and monitors counterparty credit risk of its outstanding deposits on an ongoing basis.

The Company's cash and cash equivalents are held with different major regulated financial institutions. This to mitigate our credit risk and exposure in case of non-performance by these financial institutions.

Interest rate risk

Interest rate risk is the risk of the fair value of future cash flows from financial instruments fluctuating due to changing market interest rates. The risk of market rate fluctuations run by the company mainly relates to the company's intercompany loans and cash balances. The Company does not have any third-party long-term interest-bearing debts or loans, and thus does not face significant exposure to changes in interest rates.

The Company has significant cash balances at banks including (short-term) deposits for which the Company receives interest income or pays interest in case of negative interest rates. The interest income or expense received from or paid to banks is variable.

Liquidity risk

The group uses several banks in order to avail itself of a range of overdraft facilities. Where necessary, further securities will be furnished to the bank for available overdraft facilities.

Fraud Risk Assessment

Management has made a fraud risk assessment. Astellas has put in place various policies and procedures, such as Code of Conduct and the Whistleblowers policy. On a yearly basis, Astellas staff is retrained on these policies and acknowledgement and adherence to these policies is required. The policies are also applicable for suppliers. Astellas management is not aware of any fraud or fraudulent activities within the Group.

Ethics & Compliance

Enhancing and Sustaining Integrity and Trust

Astellas is committed to long term, sustainable growth through creating and delivering value to patients and having a positive impact for society. Keeping patients and integrity at the heart of what we do is imperative, and we are passionate about this at Astellas. To create value for patients we do not compromise on patient safety, the quality of our products, or ethics and compliance - we do not compromise on integrity.

The Astellas culture is rooted in integrity, ethics and compliance. We promote an ethical culture where people are expected to act with integrity and put patients first, and the long-term sustainable success of the Company as their priorities. Integrity is one of our Astellas Way values. Together with a patient-focused mindset, employees understand how being ethical and compliant helps them live the Astellas mission.

Astellas has been continuously enhancing the organizational structure for the Ethics & Compliance function. The global Ethics & Compliance operating model allows Astellas to continue to advance and apply a more consistent global standard while still being respectful of local cultural and legal differences.

The Compliance Excellence and Transformation team in the Ethics & Compliance function continues to drive consistency on a global basis for activities that are core to the Ethics & Compliance program, such as training, communications, risk assessments, monitoring, compliance policies/processes, transparency with respect to pharmaceutical company relationships with healthcare professionals and healthcare organizations, and investigation processes.

Our Ethics & Compliance professionals continue to partner with the business to reinforce the importance of integrating integrity, ethics and compliance into business processes as doing so is critical to the sustainable success of Astellas.

Global Ethics & Compliance Structure

Ethical and Compliant Culture at Astellas

Every aspect of our work to create innovative healthcare solutions is connected to evolving sustainability. The Astellas Ethics & Compliance Program and our values-based ethical culture of integrity enables innovation and bold ideas to foster sustainable value to patients. We provide risk- balanced, proactive, innovative, and practical ethics and compliance guidance, but more importantly, we support our employees to make ethical, compliant, and intelligent business riskbased decisions. In all aspects of our business, we do what is right, which includes following the letter and the spirit of applicable laws and regulations. This enables us to grow and keep the trust we have earned and continue to earn every day from our patients and our stakeholders. At Astellas, all employees are responsible for creating an ethical culture. Astellas leaders and managers are critical to model the Astellas core values of integrity, and ethics and compliance within their teams. Ethics & Compliance works closely with the leaders and managers to engage in various initiatives designed to continually enhance and sustain an ethical and compliant culture at Astellas. This includes lessons learned and ethical decision-making workshops dedicated to providing insight into key ethical concepts that impact decision-making. They learn about practical tools they and their teams can use, to support ethical decision-making in their daily business activities. Our Ethics & Compliance program supports the fundamental mission to provide our patients with safe, effective medical products that improve their health and well-being. It is designed to keep the trust that we always act in the best interests of patients. This is strengthened through the efforts of Astellas' global, regional and local compliance committees and their awareness, knowledge and understanding of ethics and compliance in the context of business operations and activities.

Primary areas of focus

Healthcare compliance - Interactions with Healthcare Professionals

At Astellas, our fundamental mission is to provide our patients with safe, effective medical products that improve their health and well-being. To achieve that mission, it is essential that we engage with Healthcare Professionals (HCPs), Healthcare Organizations (HCOs), and patient organizations to provide them with accurate information about our products, their approved uses, and if necessary, instruction on the appropriate techniques for using the products. Astellas believes that the medical and scientific exchange between manufacturers and healthcare providers is essential to our provision of innovative and reliable pharmaceuticals and contributes to improving the health of patients around the world.

Astellas also is committed to engaging in appropriate financial relationships with HCPs and HCOs. Astellas enters into consultant agreements, which are a type of fee-for-service agreement, with HCPs and other business experts when there is a documented and reasonable business need for their unique advice, expertise, or services. All such agreements are based on defined eligibility criteria and are never entered into as a reward or incentive for past, present, or future product use or recommendation.

Healthcare Compliance is an important aspect of our Ethics & Compliance function and helps to ensure that all Astellas interactions with HCPs, HCOs and patient organizations are conducted in a legal and ethical manner and always for the ultimate benefit of patients. Our commitment to the highest standard of ethics is at the center of our global business. Compliance with both the letter and the spirit of all applicable laws, regulations, guidelines and company policies is a critical part of that commitment. All Astellas employees are expected to act with the highest ethical standards and in full compliance with applicable laws, regulations, industry guidelines and internal company policy. This helps to protect the independence of medical decision making and to limit even the appearance of improper influence or impropriety, reinforcing trust in Astellas, our brands, and our integrity.

Astellas adheres to all transparency requirements across the globe, disclosing financial relationships (transfers of value) in accordance with local law and code. Such disclosures are not only to stakeholders and legislative bodies, but also to the public, fulfilling our obligations of corporate accountability.

Anti-Bribery Anti-Corruption

To achieve our mission, it is essential that we ensure all Astellas interactions, including those with HCPs, HCOs and patient organizations, are conducted in a legal and ethical manner and always for the ultimate benefit of patients. We do this through a comprehensive Ethics & Compliance Program with established global policies, processes and systems, tools and controls, and by proactively training employees on healthcare compliance, conducting compliance risk assessments and compliance monitoring, including on aspects of its ABAC (anti-bribery anti-corruption) compliance program, to ensure there is no undue influence or even appearance of misleading or influencing a Healthcare Professional. Through continuous improvement of our ABAC program, we ensure its effectiveness by being prepared to address current and future risks. This enables sustainability of our culture of Integrity.

Conflicts of Interest

It is important to empower ownership of ethics and compliance within Astellas. One way we do this is by how we approach our own conflicts of interest. That is because the foundation of an effective Ethics and Compliance program is based on how a company manages its own internal behaviour. By enhancing the disclosure process and providing global training resources, we continue to empower employees to identify and raise potential conflicts, resulting in increased business ownership of compliance.

Data Privacy

We earn society's trust every day. Physicians, patients, employees, suppliers, and other individuals may share their personal information with Astellas, and they trust us to keep that information safe, to use it transparently, and to always handle it with care. Our Ethics & Compliance Program ensures the appropriate use of the personal information that is entrusted to us by individuals.

Ensuring fair competition

Astellas is committed to conducting its business in a fair and competitive environment and does not reach any agreements with its competitors regarding sales conditions, such as prices, sales plans and strategies, and market and customer shares. We limit our engagement with competitors and avoid any conversation concerning these topics when engagement is necessary, so that such interactions are not construed to reflect the existence of such an agreement.

International Trade compliance

Astellas relies on its ability to trade worldwide. Astellas markets and sells its products globally, and works cross-border on product development, clinical trials, and other activities, which may involve imports and exports of items. Given the global nature of Astellas' business, it is critical that Astellas complies with all applicable Trade Controls and Customs regulations. In this respect the Astellas International Trade Compliance department (ITC) has set up control frameworks regarding Export Control & Sanctions, Business Partner Screening and Customs Compliance to safeguard that Astellas' products can move smoothly around the globe, delivering value for patients.

Astellas is committed to complying with all relevant import, export, and other trade control laws and regulations. The ITC department ensures that all required licenses, permits and customs data are in place prior to an item being imported, exported or domestically transferred. At the same time, ITC provides advice, guidance and training to business partners to create awareness and ensure trade compliance.

Speaking Up

The Ethics & Compliance Program embraces all employees to foster an effective and robust integrity culture at Astellas by ensuring a psychologically safe speak up environment. Ethics & Compliance continuously encourages employees to speak up to report potential or actual violations of the Group Code of Conduct, as well as any unethical behaviour or business practices, or receive advice on how to react in the event they discover or suspect misconduct. Speak Up is critical to ensure our integrity culture at Astellas. This Speak Up culture is further supported and enabled by a global investigations program that is prompt, fair, robust and objective.

For the future

For the future, we will continue to evolve our Ethics & Compliance Program, ensuring that it is aligned to the evolving nature of our internal and external environment and focused on serving patients and stakeholders. We will take opportunities to adopt innovative tools and techniques that enhance the effectiveness and the efficiency of our program. By putting the patient first and making decisions that support delivering innovation with agility and integrity, we create a long-term and sustainable future that will continue to add value to patients and reinforces the trust on which our success is founded.

Research and development

Astellas has established a Focus Area Approach for its research and development strategy. Focus Area Approach is designed to identify drug discovery opportunities flexibly and efficiently by combining innovative biologies and modalities/ technologies to address diseases with high unmet medical needs. Primary Focus is a specific focal point within our Focus Area Approach where a lead and follow-on projects show a clear R&D path with expected VALUE for patients. Based on criteria such as higher scientific validity and identification of leads and follow-on programs, we are currently working on 5 Primary Focuses: Blindness & Regeneration, Mitochondria, Genetic Regulation, Immuno-Oncology and Targeted Protein Degradation. We also identify the combination of biologies, modalities/technologies, and diseases that may become Primary Focuses in the future.

As most R&D activities are performed outside Astellas BV, we refer to the annual report of API and to the global website: www.astellas.com for further information.

The R&D expenses incurred in FY2022/2023 in the EMEA region amount to EUR 191 million (FY2021/2022: EUR 189 million) and comprise predominantly contract R&D services performed by the Company on behalf of the IP-owners.

Corporate Social Responsibility (CSR) Activities from Manufacturing to Sales

Quality and Reliability Assurance

• Anti-Counterfeiting Activities

The infiltration of counterfeit/falsified medicines into the legitimate supply chain not only leads to the loss of opportunities for patients to receive effective medical treatment but could also pose severe adverse health consequences. This has become a serious problem worldwide. Astellas has published a clearly defined Counterfeit/Falsified Medicines Position Statement on our global website.

As an anti-counterfeit measure, Astellas commissioned a formal Committee comprised of leaders from multiple stakeholder functions (quality assurance, supply chain, etc.), and has also established a product security function to oversee daily activities relevant to productrelated security risks. These entities monitor the global market for suspicious activities affecting Astellas products and implement countermeasures targeting not only counterfeit/falsified medicines, but also diversion, theft and other illicit activities that potentially affect our products and/or present a potential risk to patients. Astellas systematically introduces anti-counterfeit measures, including, but not limited to, product serialization as stipulated by current regulations and pharmaceutical laws.

In addition, Astellas regularly engages in various collaborative activities with other members of the pharmaceutical industry to help prevent the spread of counterfeit/falsified medicines. We also proactively support and cooperate with national regulatory and judicial authorities in the prevention of counterfeit/falsified medicines.

• Significant Quality Incidents

Astellas has a recall system in place that is activated when the safety, efficacy or quality of a product is brought into question. The system ensures relevant information is promptly passed on to Health Authorities and other affected parties, and that a recall of the product in question is instigated without delay, when warranted. Globally, Astellas did not initiate a product recall in FY2022/2023. As of March 2023, there were no reports of any related health impairments received.

• Improving the Pharmacovigilance (PV) System

Astellas is continuously improving its pharmacovigilance (PV) system by strengthening collaboration between its PV function and other relevant functions, affiliates and licensing partners. This is to respond to expansion of product strategies and advance the provision of trustworthy product information and proper product use, along with compliance with regulatory requirements.

Astellas has been building a system to collect product safety information from a variety of sources. The Company annually provides product safety awareness training not only to staff closely involved with the PV function but also to all employees and contractors including affiliate staff, to maintain and strengthen swift and appropriate collection of product safety information. For external service providers outsourced by functions other than the PV function, Astellas adds requirements for the collection of product safety information in their contracts as necessary.

Astellas has been maintaining safety databases and procedures used globally to respond to environmental change. In FY2018/2019, it completed a major upgrade of its safety database and procedures to meet regulatory requirement changes. In FY2022/2023, it continued to enhance the safety database system to implement electronic submissions of safety reports in accordance with the regulatory reauirements of each country.

Astellas is exploring utilizing real-world data such as large healthcare databases for evaluation of its product safety to help minimize risk by enhancing collaboration between PV and other functions. Furthermore, Astellas continues to explore automation technologies and artificial intelligence technologies that can be used for monitoring, intaking, processing and reporting of product safety information, and early identification and analysis of safety signals. We plan to use these technologies to strengthen our PV system.

Technology Development and Manufacturing

• Stable Supply and Quality Control

Astellas places highest priority on ensuring robust manufacture and stable supply of safe and effective pharmaceuticals to patients. To ensure this, we have established our own standards aligned with Good Manufacturing Practice (GMP) and Good Distribution Practice (GDP) as the basis for consistently achieving high levels of quality. We apply these standards to manufacturing facilities and equipment, and to all stages from raw material procurement and storage to production and shipment.

Globally, Astellas is continuously investing in various manufacturing facilities with the aim of maintaining and strengthening stable supply. In 2020, construction of the Center for Active Ingredient for Biopharmaceuticals was completed at Toyama Technology Center. Bio-drug substances for clinical trials and commercial use are manufactured at the Center and supplied according to global standards. In addition, construction of the Third Fermentation Building has commenced. When the construction is completed, the active pharmaceutical ingredients of immunosuppressant Prograf® that suppress rejection after organ transplants will be manufactured at the facility. In Yaizu Technology Center, construction of aseptic drug product manufacturing lines which allow flexibility to manufacture not only antibodies but also new modalities requiring high-level technology in the future was initiated. In the gene therapy domain, Astellas has established plants in South San Francisco, California and Sanford, North Carolina (GMP manufacturing commenced in 2022), building capability for the in-house manufacture and supply of adeno-associated virus (AAV) drug substances, AAV products, and plasmids which provide self-sufficiency from research to the commercialization of gene therapy programs. Meanwhile, in the cell therapy domain, Astellas has established a new manufacturing base in Westborough, Massachusetts, in April 2020, strengthening our capability to manufacture GMP-compliant, cell-based drug substances and products for use in cell therapy. By constructing such in-house, state-of-theart manufacturing facilities, we aim to build a more robust manufacturing system capable of supplying high quality products going forward.

Provision of Product Information

• Ensuring Proper Use

Astellas' Medical Representatives (MRs) provide information on appropriate usage based on on-label information to healthcare professionals to ensure that Astellas' pharmaceutical products are used safely and effectively. In promotion of Astellas products, MRs observe high ethical standards and strictly observe the Astellas Group Code of Conduct, local codes of conduct, and the relevant laws and regulations in each country. Medical Science Liaisons (MSLs) engage with healthcare professionals to exchange scientifically based information to advance their understanding and the safe and effective use of our products in patient care. MSLs also act with high ethical standards and provide reliable, clear, fair, balanced and unbiased medical and scientific information. MSLs refrain from promotion of products, and observe high ethical standards, making compliance their top priority.

• Responding to enquiries

Astellas has a responsibility to provide truthful, balanced and unbiased medical information in response to inquiries regarding our products. In countries throughout the globe, we have Medical Information Call Centers that respond to a variety of inquiries. Astellas makes continuous efforts to improve its medical information services, with the aim of providing accurate, appropriate and consistent information. As part of these efforts, a global medical information system is used where medical responses from Group companies around the world are documented. This enables the responses to be communicated to our customers in a consistent and accurate manner.

Procurement

• Promoting CSR Procurement

To fulfil Astellas' social responsibilities across the entire supply chain, it is important for us to conduct our procurement activities with respect for compliance. To achieve this goal, Astellas has formulated the Basic Policy for Procurement Activities and the Astellas Business Partner Code of Conduct. We also undertake measures for sustainable procurement globally to build a sound network for business activities.

Astellas conducts a global assessment that includes an evaluation of sustainability risk & compliance, such as compliance with laws & respecting human rights selection process for significant business partners. The sustainability risk assessment involves judging a risk level based on a combination of the business partner's response to a questionnaire, external database information, a basic assessment by in-house experts on risks related to sustainability such as human rights, the environment, occupational health and safety and personal information protection, and, if necessary, the results of a local on-site audit carried out by an Astellas employee.

If Astellas identifies a risk that can be improved during the business partner selection process, it encourages the business partner to make the improvement and monitors its initiatives. Astellas does not engage in business if it identifies a critical risk and it judges the risk is difficult to be improved.

Moreover, business divisions continue monitoring risk status even after business transactions have begun and the supplier's sustainability risk level is assessed once every two years through a questionnaire. If necessary, the assessment takes place even within the two-year period.

Astellas encourages and welcomes a diverse supply base as part of its commitment to diversity and inclusion. This is to ensure that diverse individuals and companies are included and play a role, in our vision to turn innovative science into value for patients, irrespective of race, nationality, gender, or age. We recognise that diverse suppliers bring unique backgrounds and experiences, and these are critical contributors to our ecosystem of value.

CSR Activities in Research & Development

• Ethical Considerations in Research in Human Subjects and Research Utilizing Specimens and Information Derived from Humans

Astellas conducts research in human subjects and research utilizing specimens and information derived from humans, after appropriately obtaining the consent of the trial subjects in accordance with the Declaration of Helsinki as well as the laws, regulations and guidelines of relevant countries.

• Ethical considerations in Animal Testing

Astellas has established a Global Policy for Animal Care and Use and conducts animal testing based on this policy. On a global basis, we have established the Corporate Institutional Animal Care and Use Committee, in which members of the general public also participate as committee members, at our animal testing facilities. Astellas' initiatives in animal testing are recognized by the Association for Assessment and Accreditation of Laboratory Animal Care International (AAALAC). This International organization promotes the humane treatment of animals through international accreditation and assessment programs. As a result, all of our animal testing facilities have acquired accreditation from AAALAC International.

• Treatment of Intellectual Property

Appropriate protection of its assets through Intellectual Property Rights is critical to Astellas in order to address unmet medical needs and maintain a competitive advantage. In view of the importance of facilitating easy access to medicine patent information, Astellas participates in the Patent Information Initiative for Medicines (Pat-INFORMED) implemented by the World International Patent Organization (WIPO) to ensure easy access to Astellas' patent information on medicines by health agencies tasked with the procurement of medicines in various countries.

Astellas commits to not filing or enforcing patents in Least Developed Countries (LDCs) defined by the United Nations or Low-Income Countries (LICs) defined by the World Bank.

• Respect for Human Rights, Protection of the Privacy and Confidentiality of Personal Information of Clinical Trial Subjects, and Assurance of Reliability in Clinical Trials.

In clinical trials, we investigate new drug candidates developed through drug discovery research in further detail and assess the efficacy and safety of the new drug candidates in patients.

Under the Declaration of Helsinki, clinical trials must be ethically planned and safely conducted with full consideration to protecting the human rights and privacy of clinic trial subjects. Astellas ensures full compliance with Good Clinical Practice (GCP) and all relevant laws and regulations so that new drug candidates are developed into drugs that can be used confidently by patients. Plans for clinical trials conducted by Astellas are evaluated and approved for ethical acceptability and scientific validity by internal and external committees. In conducting clinical trials, Astellas confirms that clinical trial subjects have provided informed consent, having received a full explanation of the purpose and methods of the trial, its expected benefits and disadvantages, matters related to compensation for health impairment and other details. Moreover, we regularly implement education and training for any employee or staff members involved in clinical trials and monitor medical institutions that perform clinical trials to ensure full GCP compliance.

In addition, we manage trial data appropriately to protect the privacy of clinical trial subjects. Period assessments are also made to check that any outsourced clinical trials are conducted in accordance with the same standards.

Deepen our engagement in sustainability

Astellas recognizes our contribution to social sustainability and earning trust from society will enhance Astellas' sustainability. We have established the Sustainability Advisory Panel, and Environment, Social or Governance Working Group (ESG Working Group) led by the Sustainability division and consisting of cross-functional members. These organizations promote the following activities to contribute to sustainability from a long- term, strategic and groupwide perspective.

•	Improve "Access to Health"
•	Contribute to Environmental Sustainability with Greater Transparency
•	Advocate Our Efforts on Sustainability
•	Dialogue with Stakeholders

Access to Health

Many people across the globe struggle to receive the medical care they desperately need. Various factors contribute to this challenging situation, including a lack of appropriate treatments, healthcare system challenges, insufficient healthcare information, and poverty. At Astellas, we recognize these struggles as "Access to Health" issues and are active in tackling the root causes. We are committed to utilizing our capabilities and technology to provide healthcare solutions and improve access to health around the world.

Environmental Initiatives

Astellas' Charter of Corporate Conduct states that "recognizing that harmony between the global environment and our business activities is prerequisite to our corporate existence, we shall take proactive measures to conserve the global environment." For Astellas to continue to grow sustainably, we need to be conscious of the issues affecting our local environment and ensure that factors such as energy efficiency, climate change, environmental pollution, and waste disposal, are central to our environmental initiatives.

Advocacy

Advocacy activities are designed to promote deeper understanding among our stakeholders regarding Astellas ' efforts on Sustainability. At the same time, these activities provide an opportunity for us to reassess how we can contribute to resolving social issues and provide patients with a better quality of life. Astellas will continue crystalizing and advocating a Sustainability story which has been developed based on the updated materiality matrix.

Dialogue with Stakeholders

Astellas conducts business activities within a diverse network of relationships, including with patients and many others and our activities are supported by these relationships. We regard stakeholders such as patients and healthcare professionals, employees and shareholders and investors as particularly important stakeholders because they are significantly impacted by our business activities.

Interacting with these stakeholders who support our business activities in good faith and understanding their expectations and needs is essential to acquiring their trust and sustainably increase our enterprise value.

Further information can be found from the information published on the Group's website www.astellas.com.

Balance sheet date/activities during the year

Financial results FY2022/2023

In FY2022/2023, total EMEA net turnover have shown an increase compared to prior year from € 3,882 million to € 4,117 million, a breakdown is as follows:

	2023		2022
	€ '000,000		€ '000,000
	3rd party sales	Astellas Group	Total
Sale of products	2,804	1,190	3,994	3,771
Royalty Income	7	-	7	28
Revenue from contract services	-	116	116	83
	2,811	1,305	4,117	3,882

For a breakdown of the sales per therapeutic area we refer to section 5.1 of the financial statements.

The key contributors to 3rd party sales are the XtandiTM and BetmigaTM products. XtandiTM sales increased from € 1,345 million to € 1,548 million in FY2022/2023. The increase is primarily the result of strong performance in the Germany and Russia due to an increase in the number of prescriptions.

The sales of BetmigaTM, for overactive bladder (OAB) treatment, grew from € 232 million to € 262 million, continuing to replace Vesicare as the preferred treatment option.

The Tacrolimus franchise decreased from € 562 million to € 531 million resulting from reduced volumes in the transplantation therapeutic area and price reductions in various countries in the EMEA territory.

Included in this franchise are Prograf and Advagraf which are immunosuppressants used to suppress organ rejection following a transplant. Although the patent for these drugs has already expired in major countries, it continues to be used in transplants globally and contributes to the treatment of autoimmune diseases such as rheumatoid arthritis and ulcerative colitis. XospataTM sales have increased from € 61 million to € 80 million following new launches in the EMEA territory throughout the year.

Next to the higher net turnover, the increase in gross profit is explained by higher levels of revenue from contract services from € 83 million to € 116 million largely explained by higher contract manufacturing revenues. This increase is offset by a decrease of royalty income from € 28 million to € 7 million, largely related the divestment of products in prior years.

Furthermore, the Royalty expenses have increased from € 1,014 million to € 1,021 million, resulting from higher in-market sales of Xtandi in the EMEA region.

General and administrative expenses have increase from € 662 million to € 700 million partially explained by high inflation rates in the EMEA region. Selling expenses have decreased from € 466 million to € 408 million due to continuous efforts in cost reductions.

Other operating expense amounts to € 62.3 million, being a decrease of € 201.6 million compared to prior year and includes an impairment charge in relation to the adjusting post-balance sheet events in relation to the intention of management to sell the manufacturing business and the reassessment of the expected future economic benefits of the R&D intangible fixed asset.

FY2021/2022 showed other operating income of € 139.3 million explained by a number of legacy products being divested predominantly providing market access to medicines to Russia and former CIS countries as well as a milestone receipt in relation to the divestment of Eligard in FY2020/2021.

During FY2022/2023 financial losses have been recorded totalling € 1.9 million compared to a financial gain of € 5.4 million in FY2021/2022. The recorded loss in FY2022/2023 is primarily the result of the strengthened Euro compared to other foreign currencies, such as the US dollar, the British Pound, the Japanese Yen and the Russian Rouble.

This has resulted in an increase of the Result from ordinary activities before taxes to € 1,277 million, compared to € 1,256 million in the previous year.

Key Parameters for the year

For the year	2022/2023	2021/2022
	€ '000,000	€ '000,000
Sales	4,117	3,882
Cost of sales	1,498	1,443
Selling expenses	408	466
General and administrative expenses	933	862
Operating income / profit	1,277	1,256
Operating margin %	31.0%	32.3%
Net income / profit for the year	1,068	1,020
At year end
Total assets	3,719	3,655
Total net assets / Total equity	2,157	2,175
Major indicators
ROE (%)	49.5%	46.9%
Equity ratio (%)	58.0%	59.5%

Financing

A balanced and complete analysis of the cash flows and financing needs (in accordance with the size and complexity of the legal entity and group companies) is not applicable due to the exclusion of cash-flow statement (which is incorporated in the annual report of the shareholder).

The financial position of EMEA Group was strong at 31 March 2023 with € 3,719 million in total assets (2022: € 3,655 million), with current assets of € 3,264 million (2022: € 3,105 million) including net cash balances of € 309 million (2022: € 316 million). Total Equity as at 31 March 2023 amounts to € 2,157 million of which € 2,156 million comprises Retained Earnings (2022: € 2,153 million).

Although ABV has an overdraft Facility with Deutsche Bank of €200 million, ABV does not require long term funding from its parent or external sources due to the strong operating cash inflows it generates. The rationale for the overdraft facility is to minimize the effects of the negative interest yields on the outstanding cash balances. There are no specific terms and conditions to this facility, other than that debit balances in the target account shall not continue for more than 120 consecutive business days. No collateral has been rendered for this facility, which was not used in FY2022/2023 and is not expected to be used for next year.

The Company does not hold external financing and does not foresee external financing to be needed for next year.

War between Russia and Ukraine

From February 2022 onwards, following the official recognition of the Donetsk People Republic and Lugansk People Republic and the initiated military operations initiated by the Russian Federation, a number of countries (including the US, UK and EU) imposed sanctions against certain entities and individuals in Russia.

Such sanctions can directly impact the sanctioned entities and individuals, and entities under their control. Business counterparties of these sanctioned entities can be indirectly impacted, as well as certain industries of the Russian economy.

Additionally, the recent events in Ukraine have created challenges to businesses located and operating there. The stability of the Ukrainian economy is impacted by the ongoing events involving risks that are not typical for developed markets.

The situation, together with fluctuations in commodity prices and foreign exchange rates, have raised concerns of the management of Astellas since it has operations in and with Ukraine and Russia.

Astellas has established a cross functional Crisis Management Team which frequently assess the relevant rules and regulation in order to be compliant with regards to the imposed sanctions. Furthermore, the possible consequences for our impacted staff is managed on a case by case basis.

Up to the date of these financial statements, the financial impact on Ukraine and Russian Business is currently limited. The main financial impact is noted in relation to the Foreign exchange results as the Russian Rouble has weakened against the Euro. In FY2022/2023 the key parameters related to Ukraine and Russia are as follows:

	Ukraine	Russia	Ukraine	Russia
	FY2022/2023		FY2021/2022
	€ 'million		€ 'million
Sales	10	373	13	235
Net margin	1	26	2	17
Total Equity	8	23	9	4

Based on the currently available information and given the volume of business activities in the region, it is currently believed that the events do not have a material impact to our consolidated results.

Expectations for FY2023/2024

Global

Astellas' existing product portfolio continues to perform strongly, primarily in the Oncology therapeutic area. As a result, the ABV group is forecasting operating income of € 1.2 billion for the year ending 31 March 2024.

For FY2023/2024, the Company expects to receive approximately € 1.0 billion from its subsidiaries and to pay € 1.0 billion to its parent company.

Patent cliff

The patent cliff is an issue that cannot be avoided as long as we remain specialized in the innovative drug business. Under these conditions, in order for Astellas to achieve sustainable growth, it will be crucial for us to continuously create VALUE by seeing changes in the environment as opportunities and driving evolution.

Astellas aims to achieve sales revenue of XTANDI® and strategic products (XOSPATA®, PADCEV®, zolbetuximab, EVRENZO®, fezolinetant, AT 132) of more than €9.6 billion globally in fiscal 2025. We will maximize the product value of XTANDI®, XOSPATA®, and PADCEV®, which have already been approved for one or more indications, by continuing to implement various strategic initiatives to expand approval to include earlier stage patients. We have filed initial applications for zolbetuximab, fezolinetant, and AT132 in fiscal 2022. Our peak sales estimates are €4-5 billion globally for XTANDI® and around €8 billion in total for the strategic products from fezolinetant through AT 132, excluding XTANDI®.

EMEA

For next year, sales are expected to increase by 2%, mainly as a result of slight increase sales in our Oncology franchise and product launches in various countries, such as PADCEVTM, XospataTM and EvrenzoTM in the EMEA territory.

Cost of Goods sold are expected to increase following higher costs for royalty expenses, resulting from expected higher in-market sales in the EMEA territory. SG&A expenses are expected to show a slight increase as a result of high inflation rates across the region and increased marketing activities to support product launches. As a result, the Net margin is expected to be similar compared to FY2022/2023.

Excluding the effect of the divestment of the Meppel manufacturing facilities, no major changes in the workforce and associated costs are expected.

On a consolidated basis, the operations of the Astellas B.V. Group are largely financed by equity, representing 58.0% of total assets (last year: 59.5%). Cash at banks and in hand represent 8.3% of total assets (last year: 8.7%).

Subsequent events

Interim Dividend Payment

In the Board of Directors meeting of May 30, 2023 it was decided to pay an interim dividend to the Parent Company of € 800 million over the financial year FY2022/2023.

Sale of manufacturing plant

On May 25, 2023 Astellas announced to have made an intended decision to sell and transfer its manufacturing plant, located in Meppel, the Netherlands (the "Business"), to Delpharm Industrie SAS. Following the completing works council consultation and local legal and regulatory requirements, the divestment agreement was signed on 08 August 2023.

Upon the transfer of the Business to Delpharm, the plan is that Delpharm will continue to manufacture the products that are currently manufactured at the plant in Meppel and will deliver these products to Astellas group to ensure the stable supply of products for patients. This collaboration between Delpharm and Astellas will allow Astellas to utilize a high-quality and efficient outsourced manufacturing system in Meppel. As part of the sale and transfer of the Business, the employees will also transfer to Delpharm.

Consequently, to the sale of the operation an assessment has been made on the recoverability of the carrying value of the business assets. The result of assessment is that an impairment charge of € 49.1 million has been recognised and treated as post balance sheet adjusting event.

Fibrogen

Astellas has a long-standing relationship with Fibrogen Inc who also provide drug substance for Evrenzo. The relationship creates payables and receivables between the companies in relation to supply arrangements. Fibrogen recently announced to its shareholders that certain pipeline products are not going to achieve commercialisation as expected and is facing increased competition within its markets. Subsequently, Fibrogen Inc has announced it is operating a cost containment strategy to preserve cash. This recent announcement provides indication of increased credit risk for Astellas in relationship to its receivables which have a long settlement date. A range of outcomes regarding settlement have been considered, the result being a credit provision of € 7 million against Gross receivables of € 22 million and treated as an adjusting posting balance sheet event. Astellas continues to monitor the situation taking operational decisions where possible to further mitigate the credit and supply to patients.

Strategic Review

Management have conducted a strategic review for the future direction from FY23, this has resulted in a requirement to impair an intangible technology as future revenues have been assessed as not able to recover the cost of the asset. The result of assessment is that an impairment charge of € 14.8 million has been recognised and treated as post balance sheet adjusting event.

Manufacturing facility

On August 08, 2023 Astellas Executive Committee approved the construction of a new manufacturing facility. The estimated investments amount up to € 350 million. No capital commitments have been entered into yet as per the date of the financial report. The decision made is assessed as a post balance sheet non-adjusting event.

Capital Commitment in Venture Capital Fund

Astellas entered into a capital commitment with a Venture Capital Fund as per 13 July 2023. The company will contribute up to a maximum amount of € 50 million, with a maximum amount of € 5 million per year. The investment in the Venture Capital Fund gives the company broader and deeper insights in European market and deal flow in the field of Rx+, while minimizing resource and financial risks. This commitment is assessed as a post balance sheet non-adjusting event.

Representation

Astellas is working to promote diversity so that diverse individuals can play a role, irrespective of their identity. Respecting the diverse values of our employees and reflecting their various perspectives in our business activities not only heightens creativity in our organization, but also helps to attract and retain talented people as employees and enhances our competitiveness. Based on our global Diversity, Equity & Inclusion philosophy, Astellas integrates diversity, equity and inclusion into each region. On a global basis, more than 43% of managerial positions were held by women.

The Company's aim is that at least one-third of the members of each of the Board of Directors are women and at least one-third are men. As at 30 August 2023, two out of five members of the Board of Directors were women and three out of five members are men.

Board composition changes during the year

By shareholder's resolution dated April 01, 2022, Mr. K. Osawa has been appointed as managing directors of the Company as of April 1, 2022.

By the same resolution dated April 01, 2022, the resignation of Mr M. Hirano as managing director of the Company as of April 01, 2022 was accepted.

Board composition changes after balance sheet date

By shareholder's resolution dated April 11, 2023, Mrs. M. Dempsey has been appointed as managing directors of the Company as of April 01, 2023.

By the same resolution dated April 11, 2023, the resignation of Mr C. Zieler as managing director of the Company as of April 01, 2023 was accepted.

By shareholder's resolution dated July 01, 2023, Mrs. J. Nelissen has been appointed as managing directors of the Company as of July 01, 2023.

By the same resolution dated July 01, 2023, the resignation of Mrs E. Martens as managing director of the Company as of July 01, 2023 was accepted.

Leiden, 30 August 2023

The Board of Directors:

Mrs. M. Dempsey

Mr. K. Shiga

Mrs. J. Nelissen

Mr. S. Schutte

Mr. K. Osawa

FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEET AS AT 31 MARCH 2023

(before proposed appropriation of net profit)

Assets		2023		2022
	Note	€ '000	€ '000	€ '000	€ '000
Fixed assets
Intangible fixed assets	4.1	40,788		54,301
Tangible fixed assets	4.2	215,645		264,299
Financial fixed assets	4.3	198,682		231,293
			455,115		549,893
Current assets
Stocks	4.4	382,436		367,651
Receivables	4.5	2,572,725		2,421,563
Cash at banks and in hand	4.6	308,948		315,950
			3,264,109		3,105,164
Total assets			3,719,224		3,655,057
Group equity and liabilities
Group equity
Shareholders' equity	4.7		2,157,333		2,174,890
Provisions	4.8		638,745		574,289
Long-term liabilities	4.9		54,562		63,351
Current liabilities	4.10		868,584		842,527
Total group equity and liabilities			3,719,224		3,655,057

CONSOLIDATED PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2023

		2023		2022
	Note	€'000	€'000	€'000	€'000
Net turnover	5.1	4,116,897		3,882,103
Cost of sales	5.1	1,498,481		1,443,193
Gross profit			2,618,416		2,438,910
Selling expenses		407,927		465,994
General and administrative expenses	5.3	932,746		861,982
Total expenses			1,340,673		1,327,976
Other operating income	5.4		(1,537)		(139,296)
Net margin			1,279,280		1,250,230
Financial gains/(losses)	5.5		(1,898)		5,370
Result from ordinary activities before taxes			1,277,382		1,255,600
Taxation	5.6		(209,529)		(235,155)
Result after taxes			1,067,853		1,020,446
Attributed to:
Equity shareholder			1,067,853		1,020,446

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME FOR THE YEAR ENDED 31 MARCH 2023

	2023		2022
	€ '000	€ '000	€ '000	€ '000
Consolidated profit/(loss) after taxes		1,067,853		1,020,446
Translation difference concerning foreign activities	(19,930)		(2,041)
Actuarial gains/(losses)on employee benefit plans, net of tax	34,521		10,958
Net income/(losses) recognized directly in group equity		14,591		8,917
Total comprehensive income for the period		1,082,444		1,029,363

NOTES TO THE CONSOLIDATED BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

1. GENERAL INFORMATION

1.1 General information and description of the business

Astellas B.V. (the Company) was incorporated in the Netherlands on 25 March 1987 and is registered with the Dutch Chamber of Commerce the registration number 33193274.

The Company's registered office is at Sylviusweg 62, 2333BE in Leiden, The Netherlands. The Company is a wholly owned subsidiary of Astellas Pharma Inc., established in Tokyo, Japan.

1.2 Group activities

The main activities of Astellas B.V. and its subsidiaries in Europe, Middle East and Africa relate to the development, the manufacturing and the marketing and sales of ethical pharmaceutical products. Intellectual Property (IP) rights are used to support these activities.

1.3 Going Concern

The accounting principles applied to the valuation of assets and liabilities and the determination of results in these financial statements are based on the assumption of going concern of the company.

1.4 Exemption to the cash flow statement

The financial and other data of the Company and its subsidiaries are consolidated with that of Astellas Pharma Inc., who fully owns the Company and its subsidiaries and has enclosed a similar cash flow statement in its financial statements. The consolidated annual report of Astellas Pharma Inc. is available at www.astellas.com.

In accordance with the application exemption of Dutch Accounting Standard 360.104, no cash flow statement for the group has been prepared as part of these annual accounts.

1.5 Estimates and Judgements

The preparation of financial statements in conformity with the relevant rules requires the use of certain critical accounting estimates. It also requires management to exercise its judgement in the process of applying the Group's accounting policies. If necessary, for the purposes of providing the view required under Section 362(1), Book 2, of the Netherlands Civil Code, the nature of these estimates and judgements, including the related assumptions, is disclosed in the notes to the financial statement items in question. The areas where the most significant judgements and estimates are made are revenue recognition, tax risks (such as Pharma Taxes and income taxes), contingencies, inventory write offs, reorganization provisions, deferred tax and asset impairments.

•	Revenue Recognition: Revenue from product sales is reduced by rebates, discounts, allowances, pharma taxes and product returns given or expected to be given which vary by product arrangements and buying groups. These arrangements with purchasing organizations are dependent upon the submission of claims sometime after the initial recognition of the sale. Accruals are made at the time of sale for the estimated rebates, discounts or allowances payable or returns to be made, based on available market information and historical experience.
•	Contingencies: Management regularly analyses current information concerning various legal actions, governmental investigations, proceedings and other claims and provides provisions for probable cash outflows, including the estimate of legal expenses to resolve the matters. Internal and external lawyers are used for these assessments. In making the decision regarding the need for provisions, management considers the degree of probability of an unfavorable outcome and the ability to make a sufficiently reliable estimate of the amount of loss.
•	Provisions: The evaluation of provisions, such as onerous contracts and restructuring measures are based on best available estimates. Onerous contracts are identified by monitoring the progress of the contract and the underlying programme performance. A restructuring provision is recognized when the Company has developed a detailed formal plan for the restructuring and has raised a valid expectation in those affected that it will carry out the restructuring by starting to implement the plan or announcing its main features to those affected by it. The measurement of a restructuring provision is at the best estimate of the anticipated costs and includes only the direct expenditures arising from the restructuring, which are those amounts that are both necessarily entailed by the restructuring and not associated with the ongoing activities of the Company.
•	Income Taxes: At each end of the reporting period, the Company assesses whether the realization of future tax benefits is probable to recognize deferred tax assets. This assessment requires the exercise of judgement on the part of management with respect to, among other things, benefits that could be realized from available tax strategies and future taxable income, as well as other positive and negative factors.
•	Impairments: Judgement is applied when analyzing impairments intangible assets not yet ready for use that are performed annually and whenever a triggering event has occurred to determine whether the carrying value exceeds the recoverable amount. These analyses are generally based on estimates of discounted future cash flows.

Also, the Company applies judgement regarding the valuation of bad debt allowances as well as with claims and litigations, furthermore, the Company applies judgement when actuarial assumptions are established to anticipate future events that are used in calculating post-employment benefit expenses and liabilities. These factors include assumptions with respect to interest rates, rates of increase in healthcare costs, rates of future compensation increases, turnover rates and life expectancy.

1.6 Equity Interests

1.6.1 Ultimate Parent Company

The Company's ultimate parent company is Astellas Pharma Inc, a company incorporated in Japan, whose registered office is at 2-5-1, Nihonbashi-Honcho, Chuo Ku, Tokyo, 103-8411 Japan. Astellas Pharma Inc is listed at the Tokyo Stock exchange (Securities code: 4503). Copies of the consolidated group accounts can be found on www.astellas.com.

1.6.2 Consolidated entities

The consolidated financial statements comprise the financial statements of Astellas B.V. and its subsidiaries as at 31 March 2023. The list of consolidated subsidiaries is enclosed in the notes to the company balance sheet, note 6.3.

1.6.3 Basis of Consolidation

Subsidiaries are fully consolidated from the date of acquisition, being the date on which the group obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the parent company, using consistent accounting policies. All intra-group balances, transactions, unrealised gains and losses resulting from intra-group transactions and dividends are eliminated in full.

1.7 Offsetting

Assets and liabilities are only offset in the financial statements if and to the extent that:

•	An enforceable legal right exists to offset the assets and liabilities and settle them simultaneously; and
•	The firm intention is to settle the assets and liabilities on a net basis or simultaneously.

2. ACCOUNTING POLICIES USED FOR THE COMPANY BALANCE SHEET AND CONSOLIDATED BALANCE SHEET

2.1 Basis of preparation

The Company prepared the consolidated financial statements in accordance with Dutch GAAP, with the exemption of Pensions and Leases, which have been prepared in accordance with International Financial Reporting Standards as adopted by the European Union (IAS19 and IFRS16 respectively). This option is in accordance with Part 9 of book 2 of the Dutch Civil Code.

The Company has applied the provisions of Article 402, Part 9 of the Netherlands Civil Code, Book 2 and condensed the Company's profit and loss account accordingly.

The accompanying accounts are reported in euro for all periods presented. Amounts are in thousands of euro, unless stated otherwise. In general, assets and liabilities are stated at the amounts at which they were acquired or incurred, or current value, unless otherwise indicated.

The result represents the difference between the value of the goods delivered and services rendered and the costs and other charges for the year. The results on transactions are recognized in the year these are realized; losses are taken as soon as they are foreseeable.

The financial statements were prepared on 30 August 2023.

The shareholder has approved that the financial statements are prepared in English.

2.2 Foreign currencies

The consolidated and company financial statements are prepared in euro, the functional and presentation currency of the group. The company financial statements are completed in accordance with Dutch GAAP (RJ) 122.4 which allows presentation of translation differences to be recognized directly in equity in the financial statements. Each entity in the group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency. Translation differences resulting from the conversion of investments in these foreign activities and the differences between results translated at the average exchange rate during the year and the exchange rate prevailing on the reporting date, are recognised as a separate item in the consolidated statement of comprehensive income.

Transactions denominated in foreign currencies are initially carried at the functional exchange rates ruling at the date of transaction. Monetary balance sheet items denominated in foreign currencies are translated at the functional exchange rates ruling at the balance sheet date and non-monetary items measured at fair value in foreign currency are converted at the exchange rate prevailing at the time of determining the fair value. Non-monetary balance sheet items that are measured at historical cost in a foreign currency are translated at the functional exchange rates ruling at the date of transaction.

Exchange differences arising on the settlement or translation of monetary items denominated in foreign currencies are taken to the profit and loss account, with the exception of exchange differences resulting from net investments in foreign activities, or from loans taken out to finance or effectively hedge net investments in foreign activities. These exchange differences are taken directly to the foreign currency translation reserve. The foreign currency translation reserve is included under the legal reserves. In the case of a loan from the parent company, any conversion differences are included in the profit and loss account, even if the loan from the parent company is part of the net investment in a foreign business.

The assets and liabilities of foreign activities are translated into the group's presentation currency (euro) at the rate of exchange ruling at the balance sheet date and the income and expenses of these foreign activities are translated at the average rate of exchange for the year. Resulting exchange differences are taken directly to the legal foreign currency translation reserve. On the disposal of a foreign activity, the cumulative exchange differences taken directly to the reserves are taken to the profit and loss account as part of the gain or loss on the sale.

2.3 Leases

In accordance with the provisions of RJ 292.101 the Company applies the relevant IFRS standard (being IFRS 16) for leases.

The Company as lessee

The Company assesses whether a contract is or contains a lease, at inception of a contract. The Company recognises a right-of-use asset and a corresponding lease liability with respect to all lease agreements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Company recognises the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased asset are consumed.

The lease liabilities of the Company relate to:

a)	Buildings
b)	Vehicles
c)	Equipment, furniture & fittings

Lease payments included in the measurement of the lease liability comprise:

a)	fixed lease payments (including in-substance fixed payments), less any lease incentives;
b)	variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;
c)	the amount expected to be payable by the lessee under residual value guarantees;
d)	the exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and
e)	payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Company uses its incremental borrowing rate.

The lease liability is presented within the current and non-current liabilities line in the statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease payments made.

The Company remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever

a)	the lease term has changed or there is a change in the assessment of exercise of a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.
b)	the lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using the initial discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).
c)	a lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Company incurs an obligation for costs to dismantle and remove a leased asset, restore the site on which it is located or restore the underlying asset to the condition required by the terms and conditions of the lease, a provision is recognised and measured under RJ252.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-ofuse asset reflects that the Company expects to exercise a purchase option, the related right-of-use asset is depreciated over the useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The right-of-use assets are presented within the tangible assets line in the statement of financial position.

The Company applies RJ121 Impairment of Assets to determine whether a right-of-use asset is impaired and accounts for any identified impairment loss.

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line "General and Administrative expenses" in the statement of profit or loss.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Company has not used this practical expedient.

Impact on Lessor Accounting

The Company does not conduct lessor activities on a Consolidated level.

However, Astellas B.V. owns a manufacturing plant which it makes available to another Group company Astellas Pharma Europe B.V. The plant is used solely and exclusively by Astellas Pharma Europe B.V., in the process of manufacturing/packaging medicines for distribution of products to other Group companies who perform the sales and marketing activities of the Group's products.

No significant risks are identified with regard to the asset or financial impacts, these are all under common control within the Group and common management of Astellas B.V.

This arrangement has been in place since 1994 and as such is now assessed to be beyond any enforceable term by either party. The lease arrangement is monitored annually and will be reassessed if circumstances change. Based upon the current assessment this lease is assessed as an operating lease.

Sale and lease back transactions

For Sale and lease back transactions, IFRS 16 is applied and not RJ 292.

IFRS16 outlines that, when the transfer of the asset is a sale, a seller-lessee measures the right-of-use asset arising from the leaseback at the proportion of the previous carrying amount of the asset that relates to the right of use retained by the seller-lessee. Gains or losses are recognized only at the amount that relates to the rights transferred to the buyer-lessor.

Also, when the transfer of the asset is a sale, the buyer-lessor accounts for the purchase of an asset and accounts for the lease using lease requirements included in IFRS 16.

Compared to RJ 292, this results in the following differences:

•	If the fair value of the asset sold is higher than the carrying amount and there is an operational lease back, the difference is in principle recognized as income under the Guidelines. Under IFRS 16, the income is recognized proportionally.
•	The income is only recognized to the extent that the asset is not leased back. For this purpose, the ratio can be determined between the present value of the lease liability (adjusted for any prepayment or additional financing) and the fair value of the asset. The directly recognized income under IFRS 16 is therefore in most cases lower than under Standard 292.

2.4 Intangible fixed assets

An intangible fixed asset is recognized in the balance sheet if:

•	It is probable that the future economic benefits that are attributable to the asset will accrue to the group; and
•	The cost of the asset can be reliably measured.

Costs relating to intangible fixed assets not meeting the criteria for capitalization (for example, cost of research, internally developed brands, logos, trademark rights and client databases) are taken directly to the profit and loss account.

Cost of purchased patents, licenses, know-how and marketing rights separately acquired or acquired as part of a business combination are capitalized and amortized over their estimated useful lives, generally not exceeding 15 years. The estimated useful lives for determining the amortisation charge take into account patent lives, where applicable, as well as the value obtained from periods of non-exclusivity. Asset lives are reviewed, and where appropriate adjusted, annually.

The external cost of software is capitalized and amortized on a straight-line basis in 3 to 5 years. The external cost of other intangible fixed assets is capitalized and amortized on a straight-line basis in 3 to 5 years.

At the end of each financial year, the legal entity determines the recoverable amount of the following intangible fixed assets, even if there are no indications of an impairment:

•	an intangible asset that has not yet been put into use;
•	an intangible asset that is amortized over a useful life of more than twenty years, calculated from the date the asset is put into use.

2.5 Tangible fixed assets

A tangible fixed asset is recognized in the balance sheet if:

•	It is probable that the future economic benefits that are attributable to the asset will accrue to the group; and
•	The cost of the asset can be reliably measured.

All tangible fixed assets are valued at acquisition cost plus additional expenses to get the asset in place and in the condition necessary for its intended use, less depreciation over the estimated useful economic life and accumulated impairment losses. Land is not depreciated.

Costs of major maintenance are recognized under acquisition cost when incurred and if the recognition criteria are met. The carrying amount of the components to be replaced will be regarded as a disposal and taken directly to the profit and loss account. All other repair and maintenance costs are taken directly to the profit and loss account. Tangible fixed assets carried at cost do not include capitalized interest charges.

If significant items of property, plant and equipment can be distinguished from each other and differ in useful life or expected pattern of use, these items are depreciated separately.

Depreciation is calculated on a straight-line basis over the expected useful lives of when the asset is available for intended use:

Land	Not depreciated
Buildings	2-50 years
Machinery and equipment	2-12 years
Right of Use Assets	4-10 years
Other fixed assets	3-10 years

Assets not used in operations are valued at expected fair value less cost of disposal, only if lower than the carrying amount at the moment they were taken out of operations.

Other fixed assets contain automobiles, furniture and fixtures.

A tangible fixed asset is derecognized upon sale or when no further economic benefits are expected from its sale. A book result arising from the disposal of an item of property, plant and equipment determined as the difference between any net proceeds on disposal and the carrying amount of the asset is recognized in the profit and loss account.

2.6 Financial fixed assets

Participating interests in which the Company (in the Company financial statements) has a controlling interest or in which the Company exercises significant influence are valued according to the net asset value method.

The net asset value of the participating interest determined by valuing the assets, provisions and debts of the company in which it participates and calculating its result, is done on the same principles as the Groups own assets, provisions, debts and result. The valuation at net asset value commences at the time of acquisition of the participating interest and the result of this participating interest is therefore only included in the company's result from that date.

In determining whether there is a participation in which the legal entity exercises significant influence on business and financial policy, the whole of factual circumstances and contractual relationships have been taken into account.

If the value of the participating interest under the net asset value method has become nil, this method is no longer applied, with the participating interest being valued at nil if the circumstances are unchanged. In connection with this, any long-term interests that, in substance, form part of the investor's net investment in the participating interest are included. A provision is formed if and to the extent the company stands surety for all or part of the debts of the participating interest or if it has a constructive obligation to enable the participating interest to repay its debts. In such case, management will assess to that a cash outflow is expected in order for the participating interest to repay its debt.

Participating interests in which the Company (in the Company financial statements) has no controlling interest and exercises no significant influence are carried at cost less any impairment.

Loans granted and other receivables are primary financial assets with fixed or determinable payments that are not quoted in an active market. These financial assets are upon initial recognition measured at fair value. After initial recognition, these loans and receivables are carried at amortized cost based on the effective interest method. Gains and losses are taken to the profit and loss account when the investments are transferred to a third party or impaired, as well as through the amortization process.

Amortized cost is calculated using the effective interest method less any reductions (direct, or in the form of a provision) for impairment or un-collectability. The calculation takes into account any premium or discount at the time of acquisition, as well as transaction costs and fees forming an integral part of the effective interest rate.

2.7 Impairment of non-current assets and its recognition

At the balance sheet date, the Company tests whether there are any impairment indications (or reversals of impairments) of a fixed asset. In such case, the Company estimates the recoverable amount of the asset concerned, or, if not possible, of the cash generating unit to which it belongs. The recoverable amount is the higher of the net realizable value and the value in use. An impairment is recognized in the profit and loss account immediately.

Impairment losses recognized in prior periods are assessed at each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if and to the extent that there has been a change in the estimates used to determine the recoverable amount. The loss is reversed only to the extent that the asset's carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortization, if no impairment loss had been recognized. Reversals of impairment are recognized in the profit and loss account immediately.

2.8 Stocks

Stocks are valued at the lower of cost, using the FIFO (first in, first out) method, or net realizable value, whichever is lower. Raw materials cost includes the purchase price plus transportation and other cost of bringing the inventories to their present place and condition. The cost of work in progress and finished goods includes direct materials and labour plus the attributable portion of manufacturing overhead based on normal levels of activity. If the cost of the inventories is paid on the basis of a longer than normal payment term, the cost of the inventories is then based on the present value of the liability.

2.9 Receivables

Trade and other receivables are initially measured at fair value and subsequently measured at amortised cost less a provision for doubtful debts. Amounts added to and released from this provision are recognised in the statement of income.

The Group assesses on each balance sheet date whether there are objective indications of impairment of a receivable or a group of receivables. In the presence of objective indications for impairment, the Group has determined the amount of the loss due to the impairment and recognized it in the profit and loss account.

2.10 Cash at bank and in hand

Cash at bank and in hand includes cash in hand, bank balances, notes and checks and carried at face value. The valuation takes into account whether assets are not freely available. It also includes deposits if these are effectively at the group's free disposal, even if interest income may be lost.

Cash and short-term deposits in the balance sheet comprise cash at banks and in hand and shortterm deposits with an original maturity of three months or less.

Cash at bank and in hand not expected to be at the group's free disposal for over twelve months is classified as financial fixed assets.

2.11 Provisions

General information

Provisions are liabilities of uncertain timing or amount. A provision is recognized when the Group has a legal or constructive obligation as a result of past events; it is possible that an outflow of economic benefits will be required to settle the obligation; and a reliable estimate can be made of the amount of the obligation.

A reimbursement right is recognised as a separate asset when recovery is virtually certain, capped at the amount of the related provision.

If the effect of the time value of money is material, the provision shall be measured at the present value.

The amount of the provision is reassessed at each balance sheet date and adjusted to reflect its best current estimate. In determining the amount of the provision, future events that are significant to the amount required to settle liabilities and losses are taken into account, if there is sufficient objective evidence that those events will occur.

In the event that it is no longer probable that an outflow of resources will be necessary to settle the obligations and losses, the release of the provision is recorded in the profit and loss statement.

Pension provisions on defined benefit plans are included under provisions. The trade related provisions relate to sales rebates, bonuses and commissions payable.

Pensions and other post-retirement benefits

In accordance with the provisions of RJ 271.101 the Company applies the relevant IFRS standard (being IAS 19) for the recognition of pension plans. The Group operates a number of defined benefit pension plans, which require contributions to be made to separately administered funds.

The cost of providing benefits under the defined benefit plan is determined separately for each plan using the projected unit credit method, which attributes entitlement to benefits to the current period (to determine current service cost) and to the current and prior periods (to determine the present value of the defined benefit obligation).

Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excluding net interest and the return on plan assets (excluding net interest), are recognized immediately in the balance sheet with a corresponding debit or credit to retained earnings in the period in which they occur. Re-measurements are not reclassified to profit or loss in subsequent periods. Past service costs are recognised in profit or loss on the earlier of:

•	The date of the plan amendment or curtailment; and
•	The date that the Group recognises restructuring-related costs.

Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.

The Group recognises the following changes in the net defined benefit obligation under 'cost of sales', 'research and development expenses', 'general and administration expenses' and 'selling expenses' in consolidated profit and loss account:

•	Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements;
•	Net interest expense or income.

The defined benefit pension plan surplus or deficit in the balance sheet comprises the total for each plan of the present value of the defined benefit obligation (using a discount rate based on high quality corporate bonds), less the fair value of plan assets out of which the obligations are to be settled directly. Fair value is based on market price information and, in the case of quoted securities, is the published bid price.

Contributions to defined contribution plans are recognized in the profit and loss account in the period in which they become payable.

Provisions for jubilees

The provision for jubilees is carried at present value regarding the expected distributions throughout the employment. The calculation of the provision takes expected salary increases and the probability of being employed into account. When calculating the present value, the market rate interest of 3.5% (2022: 1.6%) of high-quality corporate bonds was used as discount rate.

Provisions for reorganization costs

A provision for reorganization costs is formed when a formal detailed plan has been developed and a justified expectation has been raised with the employees affected that the reorganization will be carried out. The provision consists of only costs necessary as a result of the reorganisation. Costs related to the ongoing activities of the legal entity have been excluded from the provision.

With respect to reorganizations for which a formal plan has been developed as at the balance sheet date, but for which either a justified expectation has been raised with those employees affected by the reorganization will be carried out or implementation of the reorganization plan has commenced only after the balance sheet date, information has been included under events after the balance sheet date.

Provisions for onerous contracts

A provision is recognised for a contract that is onerous, i.e. one in which the costs of meeting the obligations under the contract exceed the benefits to be derived.

A provision is recognized for claims, disputes and lawsuits for the best estimate of the amount for which the obligation can be settled, when it is probable that the legal person will be convicted in a lawsuit.

Trade related provisions

These are estimated on the basis of the specific terms of the relevant regulations or agreements and accrued as each of the underlying sales transactions is recognized.

The Company records provisions and accruals for expected sales rebates, wholesaler chargebacks and other rebates. Such estimates are based on analyses of existing contractual or legal obligations, historical trends and the company's experience. They are calculated on the basis of a percentage of sales for each product as defined by the contracts with the various customer groups.

Provisions for sales rebates are adjusted to actual amounts as rebates, discounts and returns are processed. Astellas B.V. considers the provision established for sales rebates to be reasonable and appropriate based on currently available information. However, the actual amount of rebates and discounts may differ from the amounts estimated as more detailed information becomes available.

Deferred income tax assets and liabilities

Deferred income tax is recognized on all temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial statements. Deferred income taxes are calculated based on tax rates prevailing at the yearend or applicable future tax rates, insofar as already decreed by law. Deferred tax assets, including those resulting from tax loss carry forwards, are only recognized as an asset when there is a reasonable probability that such benefits will be realized within the applicable fiscal period.

Deferred tax liabilities and deferred tax assets are carried on the basis of the tax consequences of the realization or settlement of assets, provisions, liabilities or accruals and deferred income as planned by the group at the balance sheet date. Deferred tax liabilities and deferred tax assets are carried at non-discounted value.

The Company together with its Dutch affiliated companies constitutes a fiscal unit. Taxes are settled by the Company with its Dutch affiliated companies based on their commercial result. The Dutch affiliated companies do not recognize any deferred tax positions in the balance sheet. This is a consequence of the chosen method of intercompany settlement. Current and deferred tax assets and liabilities are valued in accordance with the tax return (or the intended method of filing the tax return), unless it is unlikely that the tax authorities will agree.

2.12 Equity

Ordinary Shares

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects.

Translation Reserve

The cumulative currency translation reserve includes all exchange differences resulting from the translation of the financial statements of foreign entities.

2.13 Long Term liabilities

On initial recognition, long-term liabilities are carried at fair value. In case the long-term liabilities are not carried at fair value through profit or loss after initial recognition, the fair value at initial recognition must be reduced with the directly attributable transaction costs.

After initial measurement, long-term liabilities are carried at amortized cost using the effective interest method. Gains and losses are taken to the profit and loss account when the liabilities are derecognized, as well as through the amortization process.

Repayments on long-term loans due in the next year are separately stated in the notes, classified under current liabilities.

2.14 Current liabilities

On initial recognition, current liabilities are carried at fair value. In case the current liabilities are not carried at fair value through profit or loss after initial recognition, the fair value on initial recognition must be reduced by the directly attributable transaction costs.

Financial liabilities form part of the trading portfolio if they have been acquired or entered into for the purpose of selling them in the near term. Following initial measurement, they are carried at fair value without any deduction of transaction costs on disposal. Gains or losses arising from changes in the fair value are taken to the profit and loss account.

After initial measurement, other current liabilities are carried at amortized cost using the effective interest method. Gains or losses are recognized in the profit and loss account when the liabilities are derecognized, as well as through the amortization process.

2.15 Contingent liabilities

Where there is a possible obligation or a present obligation that may, but probably will not, require an outflow of resources, a contingent liability will be disclosed in the notes of the financial statements but not recognised as liabilities in the statement of financial position.

2.16 Contingent assets

Contingent assets are possible assets whose existence will be confirmed by the occurrence or nonoccurrence of uncertain future events that are not wholly within the control of the entity. Contingent assets are not recognised, but they are disclosed when it is more likely than not that an inflow of benefits will occur. However, when the inflow of benefits is virtually certain an asset is recognised in the statement of financial position, because that asset is no longer considered to be contingent.

3. ACCOUNTING POLICIES USED FOR THE COMPANY PROFIT AND LOSS ACCOUNT AND THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

3.1 Net turnover

In 2022 the Dutch Accounting Standards Boards (DASB) published new standard RJ 270 The Profit and loss account, replacing the old standard RJ 270. Some important revisions relate to:

1.	identifying the performance obligations contained in a contract:
2.	processing variable consideration; and
3.	allocating the transaction price included in a contract to identified performance obligations.

The new standard does not have a significant impact on the revenue recognition of Astellas.

Net turnover represents the proceeds from the supply of goods and services, net of VAT, discounts, etc. and royalty income. The amount of a proceeds is determined at the fair value of the consideration that has been received or to which a right has been acquired.

If the result of a transaction relating to a service can be reliably estimated and the income is probable to be received, the income relating to that service is recognized in proportion to the service delivered, the costs already incurred and the costs that (possibly) still have to be incurred in relation to the transaction can be determined reliably. Services provided by Astellas B.V. relate mostly to activities performed as contractor for affiliated companies, such as contract R&D activities, contract manufacturing activities, contract sales promotion activities and other services.. These contract activities are recognized based on cost-plus basis.

Royalties are recognized in the profit and loss account and are accounted for on an accrual basis in accordance with the content of the agreement, provided the income can be measured and the income is probable to be received.

Income from the sales of goods and the sales of product rights are recognized in the profit and loss account once all the major rights to economic benefits and significant risks relating to the product rights as well as the control of the goods have been transferred to the buyer, the income can be reliably measured, the income is probable to be received and the costs already incurred and the costs that (possibly) still have to be incurred in relation to the transaction can be determined reliably. If the income from the sale product rights is related to the normal course of business, it is included in Net turnover.

The Astellas B.V. Group is subject to various schemes whereby pharmaceutical companies need to pay amounts to (public or semi-public) clients or governments. These schemes exist in various countries in various forms and with various characteristics. In some instances, the amounts to be paid have a clear relationship with the Group's sales and/or are collected on behalf of (public or semi-public) entities or governments. In these instances, the Astellas B.V. Group deems the amounts do not result in increases in equity for the entity and deducts such amounts from revenues. These deductions represent estimates of the related obligations, requiring the use of judgement when estimating the effect of these sales deductions on gross sales for a reporting period.

3.2 Cost of sales

Cost of sales represent the direct expenses attributable to the income of such goods, including royalty expenses. The costs of the goods are recognized in the profit and loss account once all the major rights to economic benefits and significant risks relating to the goods have been transferred to the buyer, therefore the cost can be reliably measured.

Recharges for which no direct expense is attributable, and any associated mark ups, are not included as part of cost of sales.

3.3 Selling expenses

Selling expenses concern the direct expenses of the marketing and sales activities.

3.4 Research and development expenses

Research and development costs are charged to income as occurred.

Development expenditures on an individual project are recognized as an intangible asset when the Group can demonstrate:

•	The technical feasibility of completing the intangible asset so that the asset will be available for use or sale;
•	Its intention to complete and its ability to use or sell the asset;
•	How the asset will generate future economic benefits;
•	The availability of resources to complete the asset;
•	The ability to measure reliably the expenditure during development;
•	The ability to use the intangible asset generated.

Astellas B.V. considers that regulatory and other uncertainties inherent in the development of new products preclude the capitalization of internal development expenses as an intangible asset until marketing approval from a regulatory authority is obtained. Furthermore, most R&D expenses are incurred based on contract R&D activities performed for affiliated companies and as such are deemed not to enhance the intellectual property of Astellas B.V. Therefore, these are not capitalized.

3.5 General and administrative expenses, Reorganization expenses and Other operating expenses

General and administrative expenses, Reorganization expenses and other operating expenses and income (such as gains or losses from sale of assets or (reversals of) costs related to impairment tests, are determined with due observance of the aforementioned accounting policies and allocated to the financial year to which they relate. Foreseeable and other obligations as well as potential losses arising before the financial year-end are recognized if they are known before the financial statements are prepared and provided all other conditions for forming provisions are met.

3.6 Employee benefits

Salaries, wages and social security contributions are recognised in the profit and loss account based on the terms of employment.

The group recognizes an obligation if it has demonstrably committed paying a termination benefit or transition payment. In the case of remuneration for which no rights have been accrued (for example continued payment in the event of illness or incapacity for work), the (expected) expenses are taken into account in the period over which this remuneration is due. If the termination is part of a reorganization, the group includes the costs of a termination benefit or transition payment in a provision for reorganization costs.

3.7 Financial gains and losses

Interest

Interest income or expense, is recognized pro rata in the profit and loss account, taking into account the effective interest rate for the asset concerned, provided the income or expense can be measured and the income or expense is probable to be received or paid.

Exchange differences

Exchange differences arising upon the settlement or conversion of monetary items are recognised in the profit and loss account in the period that they arise. Exchange differences may include results based on the set-up of the business in the EMEA region and the different exchange rates thereof.

3.8 Taxation

Current Taxes

Taxes are calculated on the profit as disclosed in the profit and loss account based on current tax rates, allowing for tax-exempt items and cost items which are non-deductible, either in whole or in part. The measurement of current tax is based on rates that are enacted or substantively enacted at the balance sheet date.

Tax assets and liabilities are netted if the general conditions for netting are met.

Deferred taxes

A deferred tax liability is recognized for all taxable temporary differences between the valuation for tax and financial reporting purposes. A deferred tax asset is recognized for all deductible temporary differences between the valuation for tax and financial reporting purposes, and carryforward losses, to the extent that it is probable that future taxable profit will be available for setoff.

Deferred tax assets and liabilities are recognized under financial fixed assets and provisions, respectively. Deferred tax relating to items charged or credited directly to equity is itself charged or credited directly to equity.

Deferred Tax assets and liabilities are netted if two conditions are fulfilled:

1.

The Company has a legally enforceable right to set off the current income tax assets against current income tax liabilities; and

2.

The deferred tax assets and the deferred tax liabilities relate to income taxed levied by the same taxation authority on either

•	the same taxable entity; or
•	different taxable entities which intend to settle current tax liabilities and assets on a net basis or realize the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

Uncertain Tax positions

If an uncertain tax position has an effect on both the taxes due and/or deductible for the reporting period and on deferred taxes, the uncertain tax position has then been recognized and measured consistently for all these positions.

If the tax authority is likely to accept the entity's tax treatment, then the current and deferred taxes are measured consistently with the tax treatment in the income tax filing, Otherwise, the effect of the tax uncertainty is reflected in determining the related taxable profit, tax bases, unused tax losses, unused tax credits and tax rates, using the best estimate. The Group presumes that the tax authorities possess all relevant information and detection risk is not considered.

4. NOTES TO THE CONSOLIDATED BALANCE SHEET

4.1 Intangible fixed assets

	Patents and Licences	Software	Other intangible fixed assets	Intangible assets under construction	Total
	€ '000	€ '000	€ '000	€'000	€ '000
Cost
Opening balance	18,785	77,059	161	18,982	114,987
Additions	-	14,780	60	13,396	28,236
Disposals	-	(3,751)	(216)	-	(3,967)
Transfer from assets under construction	-	15.216	-	(15,216)	-
Closing Balance	18,785	103,304	5	17,162	139,256
Accumulated depreciation
Opening balance	2.730	57,956	-	-	60,686
Additions	1,280	24,846	10	-	26,136
Disposals	-	(3.719)	-	-	(3.719)
Impairment charges	14,778	600	-	-	15,378
Other	(3)	-	(10)	-	(13)
Closing Balance	18.785	79,683	-	-	98.468
Net book value at 31 March 2023	-	23,621	5	17,162	40,788
Net book value at 31 March 2022	16,055	19,103	161	18,982	54,301

The additions in Software as well as the transfers from intangible assets under construction are predominantly related to the implementation of the new SAP S4/Hana and BPC reporting system.

The disposal in Software is related to write-offs of fully depreciated assets which were not in use anymore.

The amortization charge is recorded in the profit and loss account within Cost of sales and General and administrative expenses.

Management have conducted a strategic review for the future direction from FY23, this has resulted in a requirement to impair an intangible technology as future revenues have been assessed as not able to recover the cost of the asset. The result of assessment is that an impairment charge of € 14.8 million has been recognised and treated as post balance sheet adjusting event as patents and licences. The charge has been recorded within the general and administrative expenses.

Not considering the effect of impairment of patents and licenses (R&D) intangible of € 14.8 million and the sale of the manufacturing plant operated in Meppel (€ 0.6 million) in software there were no indications of an impairment needed on the intangible fixed assets during and after the financial year, up to the date of these financial statements.

4.2 Tangible fixed assets

	Land and buildings	Machinery and equipments	Other tangible fixed assets
	€ '000	€ '000	€ '000
Cost
Opening balance	231,872	269,166	107,176
Additions	11,881	9.017	9,113
Disposals	(2,864)	(1,631)	(2,253)
Transfer from Assets under Construction	4,330	5,272	2,913
Revaluations due to currency exchange	-	-	-
Other	(289)	(2,678)	(4)
Closing Balance	244,930	279,146	116,946
Accumulated depreciation
Opening balance	125,602	227,108	83,755
Additions	8,333	11,753	12,437
Disposals	(999)	(1,627)	(1,994)
Impairment	23,646	17,235	1,814
Other	-	(2,137)	(6)
Closing Balance	156,582	252,332	96,005
Net book value at 31 March 2023	88,348	26,814	20,941
Net book value at 31 March 2022	106,270	42,058	23,405

	Assets under construction	Right of Use Assets	Total
	€'000	€ '000	€ '000
Cost
Opening balance	22,545	128,168	758,927
Additions	25,532	5,141	60,684
Disposals	-	-	(6,748)
Transfer from Assets under Construction	(12,515)	-	(0)
Revaluations due to currency exchange	0	-	0
Other	(2,103)	(6,081)	(11.155)
Closing Balance	33,459	127,228	801,709
Accumulated depreciation
Opening balance	-	58,146	494,611
Additions	-	17,193	49,716
Disposals	-	-	(4,620)
Impairment	5,805		48,500
Other	-	-	(2,143)
Closing Balance	5,805	75,339	586,064
Net book value at 31 March 2023	27,654	51,889	215,645
Net book value at 31 March 2022	22,545	70,021	264,299

Accumulated depreciation charge includes the impairment charge in relation to the adjusting postbalance sheet event triggered by the management decision to sell the manufacturing plant operated in Meppel (The Netherlands). In realisation of the strategy to divest the activities towards a buy-in specialised service rather than being an operator the carrying value of the asset was identified as no longer fully recoverable from the divestment i.e. sale of the operation. The net realisable value has been ascertained due to the review of anticipated sale proceeds less costs to separate the internal operation so that it can operate as a stand-alone business. The net realisable value is now considering as highly probable and certain following the signing of the Asset sale agreement with Delpharm Industrie SAS. The impairment charges have been recorded within Cost of Goods Sold and General and Administrative expenses.

Astellas does not have legal ownership of the underlying assets under the Right-of-use assets, which can be split as follows:

Cost	Right-of-use - Land & Buildings	Right-of-use - Machinery & Equipments	Right-of-use - Other Tangible Fixed Assets	Total
	€ '000	€ '000	€ '000	€ '000
Opening balance	87,517	1,466	39,185	128,168
Additions	-	50	5.091	5,141
Modifications / Other	(6,127)	(69)	115	(6,081)
Closing Balance	81,390	1,447	44,391	127,228

Accumulated depreciation	Right-of-use - Land & Buildings	Right-of-use - Machinery & Equipments	Right-of-use - Other Tangible Fixed Assets	Total
	€ '000	€ '000	€ '000	€ '000
Opening balance	32,347	1,055	24,744	58,146
Additions	9,601	180	7,412	17,193
Closing Balance	41,948	1,235	32,156	75,339

Other Tangible Fixed assets comprise Automobiles and Furnitures & Fixtures. The Assets Under Construction comprise asset classes related to Land & Buildings, Machinery & Equipment and other tangible assets. The disposals in Machinery & equipment as well as Other tangible fixed assets are related to write offs of fully depreciated assets which were no in use anymore.

The depreciation charge is recorded in the profit and loss account within Cost of sales and General and administrative expenses.

Not considering the effect of the sale of the Meppel manufacturing facilities (impairment of € 49.1 million), there were no indications of an impairment needed on the Tangible fixed assets during and after the financial year, up to the date of these financial statements.

4.3 Financial fixed assets

	Deferred tax	Other receivables	Total
	€ '000	€ '000	€ '000
Net book value at 31 March 2022	224,314	6,979	231,293
Additions	30,389	-	30,389
Recognized in P&L/OCI	(17,315)	(476)	(17,791)
Effect of Stock Profit adjustments	(44,906)	-	(44,906)
Exchange differences	(303)	-	(303)
Net book value at 31 March 2023	192,179	6,503	198,682

There were no indications of an impairment needed on the financial fixed assets during and after the financial year, up to the date of these financial statements.

Deferred Tax Assets

The additions are predominantly explained by tax losses carried forward. The movement for the year in the effect of Stock Profit adjustments is explained by the lower level of finished goods stock values (before intercompany stock profit elimination) at the various sites in the EMEA region, leading to a lower correction of the stock profits that are eliminated.

Other receivables

Other receivables include an insurance cover amounting to € 3.5 million in relation to provision for environmental restorations totalling € 8.0 million which is recorded with other provisions.

The remainder of the other receivables concerns primarily long-term prepaid service expenses.

4.4 Stocks

	31 March 2023	31 March 2022
	€ '000	€ '000
Finished goods	122,782	178,443
Work in progress	104,663	109,648
Raw materials	154,991	79,560
	382,436	367,651

Stocks are net of a provision for obsolescence of € 29.5 million (2022: € 50.4 million). The decrease of this provision is largely due to reversals of the provision for Evrenzo/Roxadustat as the supplier has reimbursed Astellas for the associated costs.

4.5 Receivables

	31 March 2023	31 March 2022
	€ '000	€ '000
Trade debtors	631,428	561,855
Amounts due from affiliated companies	286,844	281,553
Amounts due from shareholder	1,449,551	1,317,136
Tax receivable	82,858	138,908
Other receivables and prepayments	122,043	122,111
	2,572,725	2,421,563

All amounts are due and receivable within one year. The allowance for doubtful debts amounts to € 14.8 million (2022: € 8.5 million) and includes an allowance for Fibrogen receivables (€ 7.1 million). The amounts due from the shareholder contain loans with a maturity date within 6 months. These loans are commensurate the overall global financing strategy of Astellas. Other receivables and prepayments do not contain derivatives.

4.6 Cash at banks and in hand

Total amount of Cash at banks and in hand as at 31 March 2023 is € 308.9 million (2022: € 315.9 million).

As at 31 March 2023 (and similar to prior year) there were no deposits with an original maturity date of less than 90 days and that were withdrawable on demand as well as there were no time deposits with an original maturity date of more than 90 days.

4.7 Shareholders' equity

Reference is made to Notes to the Company Balance Sheet and Profit and Loss Account for details of shareholders' equity.

4.8 Provisions

	Pension and other post employment	Trade-related provisions	Deferred tax	Other Provisions	Total
	€ '000	€ '000	€ '000	€ '000	€ '000
Net book value at 31 March 2022	167,560	373,800	3,302	32,228	576,890
Additions	6,260	491,952	(1,294)	12,661	509,579
Amounts utilized	(12,114)	(358,658)	741	(10,446)	(380,477)
Unused amounts reversed	-	(18,981)	-	(3,722)	(22,703)
Re-measurement of the defined benefit liability	(41,861)	-	-	-	(41,861)
Foreign exchange effect	-	1,787	-	-	1,787
Other movement	(413)	(3,361)	(113)	(583)	(4,470)
Net book value at 31 March 2023	119,432	486,539	2,636	30,138	638,745

The duration of the trade related provisions and deferred tax is not expected to exceed more than one year.

The duration of the Other Provisions is as follows:

Due within one year	€ 15.8 million
Due after one year	€ 14.3 million

Provision for pensions and other post-employment benefits

	31 March 2023	31 March 2022
	€ '000	€ '000
Pension and other post-employment benefit plans	116,002	161,425
Termination indemnity	3,430	6,135
	119,432	167,560

General information

Astellas operates Defined Benefit Pension plans in the following countries: Germany, Ireland, Austria, UK, France and Switzerland.

The Schemes are closed to new employees. The Employer is exposed to actuarial risks, such as longevity risk, interest rate risk, salary risk, investment market risk and currency risk. Actuarial valuations are performed on an annual basis and the funding of the Schemes is assessed.

Investments comprise Cash and Cash equivalents, Quoted Equity investments, Debt instruments, Property and Investment funds and other investments.

For FY2022/2023 there have been no plan amendments, curtailments or settlements to these plans.

The change of the expected contribution to the plan assets of pensions for the next fiscal reporting period is € 7.2 million (2022: € 7.1 million). The weighted average duration of the defined benefit obligation for Pensions is 11 years for the German plans and 23 years for the Irish plans.

The amount expensed for defined contribution plans over the year is € 23.6 million (2022: € 23.1 million). The amount recognised in the Profit and Loss account for defined benefit plans is € 8.6 million (2022: € 8.6 million).

As the Provision for pensions and other post-employment benefits is predominantly related to the pension schemes of Germany and Ireland, only those schemes are set out as below.

Germany

The subsidiaries of the Company grant some of the employees benefits under defined benefit schemes in Germany. The benefit schemes were concluded for new employees who started after 31 December 1996 at the former subsidiary Fujisawa Deutschland GmbH. At the former Fujisawa GmbH they were concluded for new employees as of 31 March 2006. In Germany, the regulatory framework for the Company's pension plans is stipulated by the BetrAVG (German Company Pensions Act), which prescribes the minimum legal requirements for company pension plans. In addition, labour legislations and court rulings must also be observed.

The currently applicable pension arrangement for employees in Germany is an employer-financed (and employee-financed via salary deferrals) defined benefit plan, comprising old age, disability and surviving dependents' pensions:

•	Old-age pension upon or after reaching the fixed retirement age of 65;
•	Early old-age pension in the event of drawing benefits from the statutory pension insurance scheme;
•	Disability benefits upon retirement and subsequent occupational disability.

Next to contribution oriented benefit plans, the benefit schemes in Germany are foremostly final salary defined benefit schemes whereby the employer has the obligation to provide the defined and contractual agreed benefit in the future depending on the employees' length of service, salary level, length of service etc.

It is the company that bears the risk that there are insufficient funds to pay the employees their pension, albeit that in such case, a state insurance ('Pensionssicherungsverein') will have to pay the pensions on behalf of Astellas. The benefits are determined on various factors, such as the individual contributions employees can invest into their personal scheme.

Payments for defined contribution obligations including contributions to statutory pension funds are recognized as an expense for the period. Obligations from the defined benefit obligations are measured using the projected unit credit method allowing for expected future adjustments to salaries and pensions. Provisions for pensions and similar obligations are determined based on actuarial principles and using the "2018G mortality tables" published by Prof. Dr. Klaus Heubeck. The obligation is discounted at the average market interest rate and for a residual term in accordance with RiickAbzinsV (German Ordinance on the Discounting of Provisions) of 18 November 2009. Expected pension increases were taken into account at 2.25%; expected salary increases at 2.5%. The claim to employer's pension liability insurance which serves exclusively to fulfil the pension obligations and which are protected through pledging against claims asserted by all other creditors, were offset at their fair value against the pension provisions.

The Company offers employees with unlimited employment contracts the option of using untaxed compensation to make provision for old age (so-called deferred compensation). Depending on the terms of their contract, the employees may convert up to three monthly salaries. The amounts converted are paid into an employer's pension liability insurance policy and the associated benefits are pledged to the employees. The amount and timing of the receivables from the employer's pension liability insurance matches those of the benefits payable to employees. As the receivables are pledged, they generally satisfy the requirements for plan assets and are presented on a net basis. The amount is dependent on the age of the employees at the time of conversion of their compensation and the employees' decision on whether to have the deferred compensation paid out as a one-off payment or as a pension. In addition to the conversion of compensation, the deferred compensation system may include invalidity and surviving dependants' benefits, depending on the model chosen. This part of the pension liability is reinsured, Astellas pays the converted salary amount as an insurance premium to an insurer.

Ireland

Astellas Ireland participates in two contributory funded defined benefit pension plans that provides a retirement pension benefit at age 65 of one sixtieth of final pensionable salary for each year of pensionable service. Pensionable salary is defined as basic salary less 150% of the Basic State Pension. Benefits are also payable on death and following other events such as withdrawing from active service. The plans are administered by a board of Trustees which is legally separate from the Company.

The Trustees are responsible for the overall management of the Plans and the Plans are governed by Definite Trust Deeds and Rules. The plans are also governed by Irish pension law and Generally Accepted Accounting Principles in Ireland including the Accounting Standards issued by the Accounting Standards Board and promulgated by the Institute of Chartered Accountants in Ireland, including Financial Reporting Standard 101 'Reduced Disclosure Framework'.

The Trustees and Plans Administrator have appropriate procedures in place to ensure that contributions payable during the Plans have been received by the Trustees within 21 days of the month end in which they fall due and contributions payable have been paid in accordance with the rules of the Plan and the recommendations of the actuary. The salary renewal date for contributions will change for both plans, from 1st April to 1st July annually, effective from 1st July 2023.

The assets and liabilities of the defined benefit schemes are regularly reviewed by independent professionally qualified actuaries. A full assessment is undertaken every three years for funding purposes. The last full actuarial valuation was carried out as at 1 April 2020. The next triannual actuarial valuation is due as at 1 April 2023. The triannual actuarial report is not made available to members automatically, but a member can request it and must then be made available to that member within four weeks of the date of the request.

Kerry Plan

The most recent statutory gunding valuation og the Kerry Plan was carried out as at 1 April 2020 and recommended an employer contribution rate of 39.7% of pensionable salaries per annum for the three years period to 31 March 2023. Member contributions of 5% of pensionable salaries, premiums for insured risk benefits and expenses of operating the Plan are payable in addition.

The Plan had sufficient assets as at 31 March 2023 to satisfy the statutory (minimum) funding standard and funding standard reserve.

Dublin Plan

The most recent statutory funding valuation of the Dublin Plan was carried out as at 1 April 2020 and recommended an employer contribution rate of 41.5% of pensionable salaries per annum for the three years period to 31 March 2023. Member contributions of 5% of pensionable salaries, premiums for insured risk benefits and expenses of operating the Plan are payable in addition.

The Plan had sufficient assets as at 31 March 2023 to satisfy the statutory (minimum) funding standard and funding standard reserve.

Other Countries

Astellas operates both defined contribution and benefit schemes. The Defined Contribution schemes have no obligation to provide a certain level of benefit (employees bear the risk). The affiliates in Italy, Netherlands and Dubai have employee leaving indemnity liabilities representing an obligation to provide employees with a one-off payment based on the length of their service when they leave the company.

The defined benefit pension plans expose the Company to a number of risks, the most significant of which are:

Asset volatility

The liabilities are calculated using a discount rate set with reference to corporate bond yields; if assets underperform this yield, this will create a deficit. The plan holds a significant proportion of growth assets (equities, diversified growth fund and global absolute return fund) which, though expected to outperform corporate bonds in the long-term, create volatility and risk in the shortterm. The allocation to growth assets is monitored to ensure it remains appropriate given the plans' long-term objectives.

Changes in bond yields

A decrease in corporate bond yields will increase the value placed on the liabilities for accounting purposes, although this will be partially offset by an increase in the value of the bond holdings.

Inflation risk

A significant proportion of the plans' benefit obligations are linked to inflation (for active members, benefits are linked to salary increases while for deferred members, preserved benefits are increased annually in line with revaluation (and higher inflation will lead to higher liabilities). The majority of the assets are either unaffected by or only loosely correlated with inflation, meaning that an increase in inflation will also increase the deficit.

Life expectancy

The majority of the plans' obligations are to provide benefits for the life of the member, so increases in life expectancy will result in an increase in the liabilities.

Defined benefit amounts

	Defined benefit obligation	Fair value of plan assets	Total
	€ '000	€ '000	€ '000
Net book value 31 March 2021	285,366	(108,725)	176,641
Current service costs	6,655	-	6,655
Net Interest cost	3,249	(1,299)	1,950
Subtotal included in profit and loss account	9,904	(1,299)	8,605
Benefits paid/(contributions received)	(5,126)	(6,433)	(11,559)
Return on plan assets, excl. amounts in net interest expense	-	(730)	(730)
Changes in demographic assumptions	163	-	163
Changes in financial assumptions	(13,717)	-	(13,717)
Experience adjustment (gains)/losses	235	-	235
Changes in the effect of the asset ceiling	1,881	-	1,881
Subtotal included in other comprehensive income	(11,438)	(730)	(12,168)
Contributions by employer	-	-	-
Changes in foreign exchange rates	1,289	(1,066)	223
Other	(302)	(15)	(317)
Net book value 31 March 2022	279,694	(118,269)	161,425
Current service costs	6,227	-	6,227
Net Interest cost	5,097	(2,359)	2,738
Subtotal included in profit and loss account	11,324	(2,359)	8,966
Benefits paid/(contributions received)	(12,765)	650	(12,114)
Return on plan assets, excl. amounts in net interest expense	-	3,472	3,472
Changes in demographic assumptions	(41,724)	-	(41,724)
Changes in financial assumptions	(23,743)	13,839	(9,904)
Experience adjustment (gains)/losses	8,175	-	8,175
Changes in the effect of the asset ceiling	(1,881)	-	(1,881)
Subtotal included in other comprehensive income	(59,173)	17,311	(41,861)
Contributions by employer	-	--	-
Changes in foreign exchange rates	(199)	(165)	(364)
Other	(72)	23	(49)
Net book value 31 March 2023	218,810	(102,808)	116,002

The pension provision relates to the various defined benefit pension plans in the EMEA region and is based on actuarial calculations.

The present value of the defined benefit obligations and net defined benefit obligation recorded per country as per 31 March 2023 and as per 31 March 2022 can be specified as:

	Defined benefit obligation		Defined benefit obligation net of plan assets
	31 March 2023	31 March 2022	31 March 2023	31 March 2022
	€ '000	€ '000	€ '000	€ '000
Germany	87,073	98,502	85,359	96,711
Ireland	98,251	135,002	26,606	55,344
UK	16,161	20,657	(581)	4,520
Other	17,325	25,533	4,618	4,850
	218,810	279,694	116,002	161,425

The key assumptions in the actuarial calculations as per 31 March 2023 and as per 31 March 2022 are the following:

Discount rate

	31 March 2023	31 March 2022
Germany	3.7%	1.7%
Ireland	3.7%	2.0%
UK	4.6%	2.7%
Average discount rate of other countries	3.1%	1.3%

Weighted average of post retirement mortality for pensioners

Per country in years

	31 March 2023	31 March 2022
Germany	11	12
Ireland	23	26
UK	17	22
Average of other countries	12	15

This provision is of a long-term nature.

The major categories of plan assets of the fair value of the total plan assets per country as per 31 March 2023 and as per 31 March 2022 are as follows:

Investments quoted in active markets

	Ireland		United Kingdom
	31 March 2023	31 March 2022	31 March 2023	31 March 2022
Cash and cash equivalents	0.0%	-	7.6%	10.4%
Quoted equity investments	36.8%	37.8%	29.9%	27.2%
Debt instruments	14.8%	35.7%	59.8%	36.4%
Property funds	-	-	2.7%	8.4%
Investment Funds	40.3%	26.4%	-	17.6%
Others	8.2%	0.8%

A quantitative sensitivity analysis for significant assumption as at 31 March 2023 and as per 31 March 2022 is as shown below:

Assumptions	discount rate increase 0.5%	discount rate decrease 0.5%
Financial effect on the DB obligations as per 31 March 2023	3 decrease of € 15.7 million	increase of € 17.7 million
Financial effect on the DB obligations as per 31 March 2022	decrease of € 24.2 million	increase of € 27.6 million

The sensitivity analyses above have been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. Of the key assumptions, the change in discount rate is the most volatile and has the largest impact on the pension liability. Therefore only the impact on the net pension liability as a result of discount rate changes is reflected.

Other post-employment benefits

	31 March 2023	31 March 2022
	€ '000	€ '000
Termination indemnity	3,534	3,339
Plan assets on termination indemnity	(104)	195
	3,430	3,534

	2023	2022
	€ '000	€ '000
Net book value at 31 March 2022	3,534	3,339
(Income)/ Expenses	226	251
Other increases (decreases)	(330)	(56)
Net book value at 31 March 2023	3,430	3,534

Termination Indemnities represent obligations of the Company in certain countries in the EMEA regions towards employees when these reach the age of retirement, including leaving arrangements.

Trade related Provisions

The trade related provision of € 486.5 million (2022: € 373.8 million) relate to sales rebates, bonuses and commissions payable. The increase is explained by a combination of higher sales on strategic products and increased clawback and rebate percentages in various countries.

Other Provisions

The other provisions can be specified as follows:

	31 March 2023	31 March 2022
	€ '000	€ '000
Long term obligation	354	898
Restructuring provisions	11,710	8,400
Legal provisions	654	1,154
Asset Retirement Obligation	12,897	12,982
Other provisions	4,523	8,796
	30,138	32,230

Included in the restructuring provision are expected costs which are the result of a number of resource reallocation programs in the EMEA region. The decrease in other provisions is explained by the utilization of these provisions. It contains provisions in relation to the company's 3-year Term Incentive Plan; the liability for years 2 and 3 has been classed under non-current Liabilities.

The Asset Retirement Obligation includes environmental restorations totalling € 12.9 million of which € 7.9 million is related to Ireland, € 3.3 million is related to the Penicillin facilities clean up in Meppel (The Netherlands) and € 1.7 million is related to dilapidation provision in relation to the offices in Addlestone (UK). In relation to this provision, the Company has an insurance cover in place amounting to € 3.5 million which is recorded as a financial fixed asset in the financial statements.

The split in the Non-current and Current portion of the other provisions is as follows:

	Current	Non Current	Total
	€ '000	€ '000	€ '000
Net book value at 31 March 2022	15,851	16,379	32,230
Additional provisions	12,244	417	12,661
Amounts utilized	(10,447)	-	(10,447)
Unused amounts reversed	(3,722)	-	(3,722)
Reclassification from Non-Current to Current	2,410	(2,410)	0
Other movements including exchange results	(497)	(86)	(583)
Net book value at 31 March 2023	15,838	14,300	30,138

The current portion of the provision is expected to be settled within one year. The non-current portion is expected to be settled after one year.

4.9 Long-term liabilities

	31 March 2023	31 March 2022
	€ '000	€ '000
Lease Liabilities	40,929	51,886
Long-term Employee Benefits	13,633	11,465
	54,562	63,351

	Lease liabilities	Long-term employee benefits	Total
	€ '000	€ '000	€ '000
Net book value at 31 March 2022	51,886	11,465	63,351
Additions	10,030	6,289	16,319
Repayments	(18,788)	-	(18,788)
Transfer to liabilities - current	(1,503)	(3,943)	(5,446)
Modifications	668	23	691
Interest expenses	1,431	-	1,431
Unused amounts reversed	-	(47)	(47)
Terminations	(3,314)	-	(3,314)
Other movement	519	(154)	365
Net book value at 31 March 2023	40,929	13,633	54,562

Total Long Term Employee benefits at March 31, 2023 includes lease liabilities (including accretion of interest) of € 40.9 million which have been recorded following the adoption of IFRS 16 lease accounting in FY2019/2020.

The contractual maturity of the lease liabilities in un-discounted amounts is as follows:

Due after one year	€ 12.4 million
Due between two and 5 years	€ 21.5 million
Due after five years	€ 8.2 million

The total cash outflow for the leases (both short- and long-term) is € 19.4 million (2021: € 21.0 million)

The duration of the other long-term employee benefits is not expected to exceed 5 years.

4.10 Current liabilities

	31 March 2023	31 March 2022
	€ '000	€ '000
Trade creditors	71,655	85,087
Amounts due to affiliated companies	164,817	172,237
Amounts due to shareholder	370,872	296,256
Tax payable	20,645	18,214
Other payable and accruals	167,675	189,691
Deferred income	703	2,152
Lease Liabilities	16,865	23,736
Accrued employee bonuses	55,352	55,154
	868,584	842,527

Total Current Liabilities at March 31, 2023 includes lease liabilities of € 16.9 million which have been recorded following the adoption of IFRS 16 lease accounting in FY2019/2020.

The movements in amounts to affiliated companies and due to the shareholders compared to prior year are explained by timings of settlement of intercompany transactions.

All current liabilities fall due in less than one year.

Other payables and accruals are accrued expenses resulting from ordinary course of business, such as payable marketing, R&D, COGs & Salary costs.

4.11 Arrangements and commitments not shown in the balance sheet

Collaterals

Astellas B.V. and its subsidiaries have pledged collaterals totalling € 75.1 million (2022: € 8.6 million) related to an agreement for which a bank takes responsibility to pay for its client debts as appropriate. Astellas is not liable for the costs.

Bank guarantees

Astellas B.V. and its subsidiaries have bank guarantees outstanding of € 16.1 million (2022: € 9.4 million), mainly in relation with health insurance funds, customs, Tax Authorities and rental agreements.

Guarantees

As a holding company for Astellas Ireland Co. Ltd and for the purposes of the exemption referred to in section 357(1) of the Companies Act 2014 (the "Act"), and not otherwise, on June 19, 2023 Astellas B.V. has irrevocably guaranteed in respect of the whole of the financial year of Astellas Ireland Co. Limited ended on 31 March 2023, all of the liabilities of Astellas Ireland Co. Limited referred to in section 357(1)(b) of the Act; provided that this guarantee shall not extend to any liability or commitment of Astellas Ireland Co. Limited which shall not have arisen otherwise than in respect of that financial year or which shall not constitute a liability within the meaning of section 357(1 )(b) aforesaid.

As a holding company for Astellas Pharma Co. Ltd and for the purposes of the exemption referred to in section 357(1) of the Companies Act 2014 (the "Act"), and not otherwise, on June 19, 2023 Astellas B.V. has irrevocably guaranteed all amounts shown as liabilities in the statutory financial statements of Astellas Pharma Co. Limited ended on 31 March 2023 all amounts shown as liabilities in the statutory financial statements of Astellas Pharma Co. Limited in respect of that financial year; provided that this guarantee shall not extend to any liability or commitment of Astellas Pharma Co. Limited which shall arise or may have arisen otherwise than in respect of that financial year or which does not constitute a liability within the meaning of section 357(1)(b) of the Act.

Euler Hermes Europe S.A. (N.V.) has provided a guarantee to Astellas Ireland Co. Ltd in the amount of € 1.3 million (2022: € 1.3 million) in respect of excise duty. A counter-indemnity exists in respect of this guarantee.

Astellas B.V. has provided Astellas Ireland Co. Ltd a specific guarantee for environmental liabilities for the CRAMP (Closure Restoration and Aftercare Management Plan) fir the Dublin Plant licensed site of € 2.7 million and the Kerry Landfill licensed site of € 1.7 million. These amounts have been agreed with the EPA (Environmental Protection Agency).

Astellas B.V. has not recorded a provision in accordance with Dutch GAAP RJ252.424 and RJ252.425.

Under the provisions of Article 403, Part 9 of the Netherlands Civil Code, Book 2, the Company is wholly and severally liable for the liabilities and commitments of subsidiaries incorporated in the Netherlands, which are listed under note 6.3. Accordingly, the financial statements of these subsidiaries are not separately filed with the Chamber of Commerce.

Letters of Support

As a holding company for Astellas Pharma Europe Ltd and for the provision of financial support, the Company has issued a parental support letter on 16 June 2023 to Astellas Pharma Europe Ltd in which the Company has confirmed to consider the recoverability if the intercompany receivable balances in case the counterparties are not able to pay these amounts.

The financial support is provided for future performances, specifically the 12 months period after the date of approval of the statutory accounts of Astellas Pharma Europe Ltd for the year ending 31 March 2023.

As a holding company for Astellas Pharma Ltd and for the provision of financial support, the Company has issued a parental support letter on 16 June 2023 to Astellas Pharma Ltd in which the Company has confirmed to consider the recoverability if the intercompany receivable balances in case the counterparties are not able to pay these amounts.

The financial support is provided for future performances, specifically the 12 months period after the date of approval of the statutory accounts of Astellas Pharma Ltd for the year ending 31 March 2023.

The Company has not recorded a provision in accordance with Dutch GAAP RJ252.424 and RJ252.425.

Non-cancellable commitments of the Group

The Group has non-cancellable commitments related to software (€ 1.0 million), PP&E investments (€ 5.5 million), Patents (€ 5.7 million) and R&D Milestone payments (€ 56.8 million).

Contingent assets and liabilities

The Group has contingent assets of € 0.5 million are related to uncertain claims against 3rd parties (FY2021/2022: € 0.7 million).

The Group has contingent liabilities for approximately € 0.8 million and are mainly related to claims made against the Company (FY2021/2022: € 4.1 million) and for which the indication of the uncertainties relating to the amount or timing of any outflow is less than 50%.

Dutch Corporate Income Tax

Under the fiscal unit conditions, each of the participating Dutch affiliated companies is wholly and severally liable for Dutch corporate income tax liabilities of the fiscal unit.

The Dutch affiliated companies are Astellas Pharma Europe B.V., Astellas Pharma B.V. and Astellas Pharma International B.V. As per 01 April 2021, the branch office of Astellas Pharma Europe Ltd (UK) located in The Netherlands, is included in the Dutch Fiscal Unity. This only applies for Corporate Income Tax. For VAT, the branch office is not included in the Dutch Fiscal Unity.

5. NOTES TO THE CONSOLIDATED PROFIT AND LOSS ACCOUNT

For the Company profit and loss account, the Company uses the exemption as mentioned in section 402 of Book 2 of the Dutch Civil Code.

5.1 Segmentation of net turnover

Most of the revenue is generated from sales of pharmaceutical products and services and can be specified as follows:

	2023	2022
	€ '000	€ '000
Sale of products	3,993,910	3,771,340
Royalty Income	7,426	27,702
Revenue from contract services	115,561	83,061
	4,116,897	3,882,103

Net turnover includes sales to affiliated companies of € 1,295.2 million (FY2021/2022: € 1,283.9 million).

The geographical split in the Sale of product is as follows:

	2023	2022
	%	%
EMEA	68%	67%
Japan	3%	2%
USA	18%	21%
Asia	10%	9%
Oceania	1%	1%
	100%	100%

The Sale of product per therapeutic area can be split as follows:

	2023	2022
	€ '000	€ '000
Oncology	1,688,871	1,457,964
Urology	1,276,828	1,331,783
Transplantation	855,662	884,863
Other products	172,549	96,729
	3,993,910	3,771,340

Revenue from contract services can be split as follows:

	2023	2022
	€ '000	€ '000
Revenue from contract research and development	52,319	41,285
Revenue from contract sales promotion	-	5,301
Revenue from contract manufacturing	29,344	22,087
Revenue from other services	33,898	14,388
	115,561	83,061

Cost of Goods can be split as follows

	2023	2022
	€ '000	€ '000
Cost of goods sold	439,246	429,466
Royalty expenses	1,020,622	1,013,727
Impairment charges Tangible Fixed assets	38,613	-
	1,498,481	1,443,193

Royalty expenses are mainly payable to Astellas Pharma Inc (Japan). The impairment charges are in relation to the adjusting post-balance sheet events triggered by the decision of management to sell the manufacturing business.

5.2 Personnel cost

	2023	2022
	€ '000	€ '000
Wage and salaries	433,512	423,505
Pension costs	32,402	31,992
Social security costs	48,437	43,837
Other	43,650	34,434
	558,001	533,768

These personnel costs have been allocated to cost of sales, selling and general and administrative expenses respectively based on the employment of personnel. The increase in the category other is related to restructuring and termination benefits recorded.

5.2 Amortization and depreciation of intangible and tangible fixed assets

	2023	2022
	€ '000	€ '000
Intangible fixed assets	26,136	17,091
Tangible fixed assets	49,716	47,707
Impairment charges intangible fixed assets	15,378	-
Impairment charges tangible fixed assets	48,500	-
	139,730	64,798

The impairment charges are in relation to the adjusting post-balance sheet events triggered by the decision of management to sell the manufacturing business as well as the strategic review for the future direction from FY23, resulting in a requirement to impair an intangible technology as future revenues have been assessed as not able to recover the cost of the asset. These impairment charges have been recorded within the Cost of Goods Sold and the General and Administrative expenses.

5.3 General and administrative expenses

	2023	2022
	€ '000	€ '000
Research and Development expenses	191,284	188,523
General and administrative expenses	699,615	661,620
Reorganization expenses	16,582	11,839
Impairment charges Intangible Fixed assets	14,778	-
Impairment charges Tangible Fixed assets	10,487	-
	932,746	861,982

The impairment charges are in relation to the adjusting post-balance sheet events triggered by the decision of management to sell the manufacturing business as well as the strategic review for the future direction from FY23, resulting in a requirement to impair an intangible technology as future revenues have been assessed as not able to recover the cost of the asset.

5.4 Other operating income

	2023	2022
	€ '000	€ '000
Transfer of Marketing rights	(1,483)	(139,296)
Other	(54)	-
	(1,537)	(139,296)

Other operating income amounts to € 1.5 million, being a decrease of € 137.8 million compared to prior year. FY2021/2022 showed other operating income of € 139.3 million explained by a number of legacy products being divested predominantly providing market access to medicines to Russia and former CIS countries as well as a milestone receipt in relation to the divestment of Eligard in FY2020/2021.

5.5 Financial gains/(losses)

	2023	2022
	€ '000	€ '000
Interest income	(20,978)	(3,595)
Interest expense	3,375	3,742
Foreign exchange gains	(134,720)	(30,796)
Foreign exchange losses	154,220	25,279
	1,897	(5,370)

The interest income relates to transactions with third parties as well as to transactions with related parties. The interest expenses include € 0.5 million relating to lease liabilities and negative interest paid of € 0.0 million (2022: €1.5 million). The exchange results relate mostly to results realized on positions held on the Russian Rouble and Great British Pound in the ordinary course of business.

5.6 Taxation

The major components of current income tax expense are:

	2023	2022
	€ '000	€ '000
Current income tax charge	183,943	153,535
Deferred income tax charge	25,586	81,620
	209,529	235,155

Corporate income tax rates are different in countries in which the company operates, and applicable tax rates vary from 9% to 33.0%. The consolidated effective tax rate is 16.4% (FY2021/2022: 18.7%) and is impacted by tax-exempt profit elements.

Deferred tax is related to origination and reversal of temporary differences, predominantly in relation to stock profit eliminations, accrued expenses and defined benefit plans. The movement compared to prior year is mainly related to the movement in stock profit eliminations.

The reconciliation between the effective tax rate and the weighted average of the applicable tax rates to the consolidated financial statements is as follows:

	2023	2022
	%	%
Weighted average of the applicable tax rates	14.7%	17.2%
Non-deductible expenses	0.4%	0.5%
Other	1.3%	1.0%
Effective tax rate	16.4%	18.7%

The movement for the year in Weighted average of the applicable tax rates compared to prior year is explained by the higher income generated in Ireland compared to prior year.

Tax rates do not differ according to whether profits or reserves are retained or distributed, nor do any other differences exist in this respect.

Under the fiscal unit conditions, each of the participating Dutch affiliated companies is wholly and severally liable for Dutch corporate income tax liabilities of the fiscal unit. As the branch office of Astellas Pharma Europe Ltd is part of the Dutch Fiscal Unity, this legal entity is indirectly liable for Dutch corporate income tax as well.

5.7 Audit fees

The costs of the group for the external auditor Ernst & Young Accountants LLP (Netherlands) and their associated subsidiaries are charged to the financial year are set out below:

	2023				2022
	EY Accountants LLP (The Netherlands)	Other EY Firms	Other Firms	Total	Total
	€ '000	€ '000		€ '000	€ '000
Audit of financial statements	3,500	1,312	297	5,109	4,878
Other assurance services	-	-	9	9	11
Tax advisory	-	-	86	86	60
Other Non-audit services	-	-	19	19	179
	3,500	1,312	411	5,223	5,128

The fees stated above for the audit of the financial statements are based on the total costs incurred in FY2022/2023.

5.8 Employee information

The average number of employees during FY2022/2023 was 3,681 (FY2021/2022: 3,742). The number of staff employed can be specified as follows:

	2023	2022
Marketing & Sales	1,578	1,687
Production	756	727
Research and development	644	624
General and administrative	703	704
	3,681	3,742

Of these employees, 3,030 were employed outside the Netherlands (2022: 3,244).

5.9 Financial instruments

Foreign exchange risk

Foreign exchange rate fluctuations: the business results and financial position are subject to the impact of exchange rate fluctuations due to the extensive international operations. For the EMEA region, the Group mainly operates in the European Union. The associated currency risk for the Group largely concerns positions and future transactions in US dollars, British pounds, Japanese yen and Russian roubles. Due to the volatility of the Russian Rouble, significant exchange differences were recorded on results realized on positions held in relation to activities in Russia in the ordinary course of business. The Global Treasury Committee reviews regularly the associated risks in terms of foreign exchange rate fluctuations and determines if financial instruments should be used in order to mitigate these risks.

The company is exposed to changes in foreign currency exchange rates on its cash deposits and loans denominated in US dollars and on some of the sales of its subsidiaries (mainly USD and GBP). As at 31 March 2023, Astellas B.V. had no contracts outstanding (2022: USD 0 million). Also, the company is exposed to changes in foreign currency exchange rates on its trade receivable and payable positions with the parent company denominated in Japanese Yen. As at 31 March 2023, Astellas B.V. had a total net payable position of € 56.0 million (2022: € 17.5 million).

Credit risk

The group has debtors in certain geographical regions which have economic and political instability. As a result, the group has credit risks on its customer receivables and provisions for doubtful debts are recognized based on management assessment. There are no concentrations of credit with a single customer which carries an unusually high credit risk. The maximum carrying amount of financial assets and the exposure to credit risk amounted to € 2,170.5 million (FY2021/2022: € 1,924.1 million). This amount includes the receivable on the shareholder.

The Company has issued loans to its shareholder and other affiliated companies. These counterparties do not have a history of non-performance.

The Company has implemented a counterparty credit risk policy in its treasury framework and monitors counterparty credit risk of its outstanding deposits on an ongoing basis.

The Company's cash and cash equivalents are held with different major regulated financial institutions. This to mitigate our credit risk and exposure in case of non-performance by these financial institutions.

Interest rate risk

Interest rate risk is the risk of the fair value of future cash flows from financial instruments fluctuating due to changing market interest rates. The risk of market rate fluctuations run by the company mainly relates to the company's intercompany loans and cash balances. The Company does not have any third-party long-term interest-bearing debts or loans, and thus does not face significant exposure to changes in interest rates.

The Company has intercompany loan outstanding to affiliated companies. On these loans Astellas B.V. receives a variable interest rate. The risk of market rate fluctuations run by the Company mainly relates to these intercompany loans.

The Company has significant cash balances at banks including (short-term) deposits for which the Company receives interest income or pays interest in case of negative interest rates. The interest income or expense received from or paid to banks is variable.

Liquidity risk

The group uses several banks in order to avail itself of a range of overdraft facilities. Where necessary, further securities will be furnished to the bank for available overdraft facilities.

The total Contractual Undiscounted Cash Flows of the remaining contractual maturities for financial liabilities (3rd parties only) amounts to € 131.7 million at 31 March 2023 (FY2021/2022: € 150.7 million). Of this amount, € 89.6 million matures within 1 year (FY2021/2022: € 98.1 million).

Fair values

In view of their short-term nature, and the floating interest rate, combined with no change in the risk profile, the fair values of financial instruments included in assets and liabilities approximate their carrying amounts of € 780.4 million (FY2021/2022: € 678.6 million). The fair value of the other long-term liabilities is also estimated to approximate its carrying amount at 31 March 2023.

5.10 Related party transactions

Sales include product sales to other affiliated companies amounting to € 1,190.0 million (FY2021/2022: € 1,200.8 million), R&D revenue of € 45.6 million (FY2021/2022: € 41.3 million) and other revenues of € 66.3 million (FY2021/2022: € 41.8 million).

Products were purchased from the ultimate parent company for a total amount of € 51.8 million (FY2021/2022: € 28.5 million) and from another affiliated company of € 53.6 million (FY2021/2022: € 41.5 million). Cost of sales include € 1,022.8 million (FY2021/2022: € 1,009.1 million) as royalty expenses from affiliated companies.

There were recharges from other affiliated companies for sales promotion expenses of € 245.2 million (2021/2022: € 305.8 million), R&D expenses of € 30.3 million (2021/2022: € 23.9 million) and SG&A expenses of € 107.4 million (FY2021/2022: € 106.8 million).

Interest of € 15.4 million has been received on the intercompany loans with the shareholder (2021/2022: € 2.9 million)

All transactions were carried out in the ordinary course of business and at arm's length.

5.11 Directors

During the FY2022/2023, the Company had five directors and no supervisory directors. The directors received € 2.5 million in total for salaries, pension costs and remuneration expenses during FY2022/2023 (FY2021/2022: € 3.1 million) and is related to currents directors as well as former directors.

Events after the balance sheet date for the consolidated financial statements

Interim Dividend Payment

In the Board of Directors meeting of May 30, 2023 it was decided to pay an interim dividend to the Parent Company of € 800 million over the financial year FY2022/2023.

Sale of manufacturing plant

On May 25, 2023 Astellas announced to have made an intended decision to sell and transfer its manufacturing plant, located in Meppel, the Netherlands (the "Business"), to Delpharm Industrie SAS. Following the completing works council consultation and local legal and regulatory requirements, the divestment agreement was signed on 08 August 2023.

Upon the transfer of the Business to Delpharm, the plan is that Delpharm will continue to manufacture the products that are currently manufactured at the plant in Meppel and will deliver these products to Astellas group to ensure the stable supply of products for patients. This collaboration between Delpharm and Astellas will allow Astellas to utilize a high-quality and efficient outsourced manufacturing system in Meppel. As part of the sale and transfer of the Business, the employees will also transfer to Delpharm.

Consequently, to the sale of the operation an assessment has been made on the recoverability of the carrying value of the business assets. The result of assessment is that an impairment charge of € 49.1 million has been recognised and treated as post balance sheet adjusting event.

Fibrogen

Astellas has a long-standing relationship with Fibrogen Inc who also provide drug substance for Evrenzo. The relationship creates payables and receivables between the companies in relation to supply arrangements. Fibrogen recently announced to its shareholders that certain pipeline products are not going to achieve commercialisation as expected and is facing increased competition within its markets. Subsequently, Fibrogen Inc has announced it is operating a cost containment strategy to preserve cash. This recent announcement provides indication of increased credit risk for Astellas in relationship to its receivables which have a long settlement date. A range of outcomes regarding settlement have been considered, the result being a credit provision of € 7 million against Gross receivables of € 22 million and treated as an adjusting posting balance sheet event. Astellas continues to monitor the situation taking operational decisions where possible to further mitigate the credit and supply to patients.

Strategic Review

Management have conducted a strategic review for the future direction from FY23, this has resulted in a requirement to impair an intangible technology as future revenues have been assessed as not able to recover the cost of the asset. The result of assessment is that an impairment charge of € 14.8 million has been recognised and treated as post balance sheet adjusting event.

Manufacturing facility

On August 08, 2023 Astellas Executive Committee approved the construction of a new manufacturing facility. The estimated investments amount up to € 350 million. No capital commitments have been entered into yet as per the date of the financial report. The decision made is assessed as a post balance sheet non-adjusting event.

Capital Commitment in Venture Capital Fund

Astellas entered into a capital commitment with a Venture Capital Fund as per 13 July 2023. The company will contribute up to a maximum amount of € 50 million, with a maximum amount of € 5 million per year. The investment in the Venture Capital Fund gives the company broader and deeper insights in European market and deal flow in the field of Rx+, while minimizing resource and financial risks. This commitment is assessed as a post balance sheet non-adjusting event.

Leiden, 30 August 2023

The Board of Directors:

Mrs. M. Dempsey

Mr. K. Shiga

Mrs. J. Nelissen

Mr. S. Schutte

Mr. K. Osawa

COMPANY BALANCE SHEET AS AT 31 MARCH 2023

(before proposed appropriation of result)

Assets		2023		2022
	Note	€ '000	€ '000	€ '000	€ '000
Fixed assets
Tangible fixed assets	6.2	13,743		24,155
Financial fixed assets	6.3	2,267,031		1,966,407
			2,280,774		1,990,562
Current assets
Receivables	6.4	1,785,964		2,060,187
Cash at banks and in hand	6.5	198,342		219,440
			1,984,306		2,279,627
Total assets			4,265,080		4,270,189
Group equity and liabilities
Shareholders' equity	6.6
Share capital		6,116		6,116
Share premium		526		526
Translation reserve		(5,094)		14,836
Retained earnings		1,087,932		1,132,966
Result for the year		1,067,853		1,020,446
			2,157,333		2,174,890
Provisions
Deferred tax liabilities		49		173
			49		173
Long Term liabilities	6.7		16,217		16,502
Current liabilities	6.8		2,091,481		2,078,624
Total group equity and liabilities			4,265,080		4,270,189

COMPANY PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDED 31 MARCH 2023

	2023		2022
	€ '000		€ '000	€ '000
Equity share in earnings of affiliated companies	1,073,603		1,025,936
Other income / (expenses) after taxation	(5,750)		(5,490)
Result after taxes		1,067,853		1,020,445

NOTES TO THE COMPANY BALANCE SHEET AND PROFIT AND LOSS ACCOUNT

6. NOTES TO THE COMPANY BALANCE SHEET

6.1 GENERAL INFORMATION

The company financial statements have been prepared in accordance with the statutory provisions of Part 9, Book 2, of the Netherlands Civil Code and the firm pronouncements in the Guidelines for Annual Reporting in the Netherlands as issued by the Dutch Accounting Standards Board.

Astellas B.V. (the Company) was incorporated in the Netherlands on 25 March 1987 and is registered with the Dutch Chamber of Commerce under the registration number 33193274. The Company's registered office is at Sylviusweg 62, 2333BE in Leiden, The Netherlands.

The accounting policies for the company financial statements and the consolidated financial statements are the same. Affiliated companies are stated at net asset value in accordance with Note 2.6 to the consolidated financial statements. For the accounting policies for the company balance sheet and profit and loss account, reference is made to the notes to the consolidated balance sheet and profit and loss account.

However, Astellas B.V. owns a manufacturing plant which it makes available to another Group company Astellas Pharma Europe B.V. The plant is used solely and exclusively by Astellas Pharma Europe B.V., in the process of manufacturing/packaging medicines for distribution of products to other Group companies who perform the sales and marketing activities of the Group's products.

No significant risks are identified with regard to the asset or financial impacts, these are all under common control within the Group and common management of Astellas B.V. This arrangement has been in place since 1994 and as such is now assessed to be beyond any enforceable term by either party. The lease arrangement is monitored annually and will be reassessed if circumstances change. Based upon the current assessment this lease is assessed as an operating lease.

The underlying asset has a carrying value of € 1.8 million, this asset is recorded within balance of Land and Buildings within Tangible Fixed assets of the company balance sheet.

Astellas B. V. charges rent to Astellas Pharma Europe B. V. for the equivalent of depreciation charge of the plant at cost being approximately € 750k per year. The annual lease payments can vary since the amount is partly determined based on fiscal value of the building. Please note that there are non-lease component payments that do not depends on an index or a rate.

We refer to section 5.4 Other Operating income and expense in relation to the divestment of the facilities.

6.2 Tangible fixed assets

	Land and buildings	Machinery and equipments	Other tangible fixed assets
	€ '000	€ '000	€ '000
Cost
Opening balance	26,709	1,151	288
Additions	-	-	140
Disposals		-	(101)
Transfer from Assets under construction	674	-	-
	27,383	1,151	327
Accumulated depreciation
Opening balance	14,455	914	204
Impairments	10,487	-	-
Additions	660	212	24
Disposals	-	-	(75)
	25,602	1,126	153
Net book value at 31 March 2023	1,782	24	174
Net book value at 31 March 2022	12,255	236	84

	Assets under construction	Right of Use Assets	Total
	€ '000	€ '000	€ '000
Cost
Opening balance	677	13,197	42,022
Additions	38	2,303	2,481
Disposals		-	(101)
Transfer from Assets under construction	(674)	-	-
	41	15,500	44,402
Accumulated depreciation
Opening balance	-	2,294	17,867
Impairments	-	-	10,487
Additions	-	1,484	2,380
Disposals	-		(75)
	-	3,778	30,659
Net book value at 31 March 2023	41	11,722	13,743
Net book value at 31 March 2022	677	10,903	24,155

Accumulated depreciation charge includes the impairment charge in relation to the adjusting postbalance sheet event triggered by the management decision to sell the manufacturing plant operated in Meppel (The Netherlands). In realisation of the strategy to divest the activities towards a buy-in specialised service rather than being an operator the carrying value of the asset was identified as no longer fully recoverable from the divestment i.e. sale of the operation. The net realisable value has been ascertained due to the review of anticipated sale proceeds less costs to separate the internal operation so that it can operate as a stand-alone business. The net realisable value is now considering as highly probable and certain following the signing of the Asset sale agreement with Delpharm Industrie SAS. The impairment charges have been recorded within General and Administrative expenses.

Astellas does not have legal ownership of the underlying assets under the Right-of-use assets, which can be split as follows:

Cost	Right-of-use - Land & Buildings	Right-of-use - Machinery & Equipments	Right-of-use - Other Tangible Fixed Assets	Total
	€ '000	€ '000	€ '000	€ '000
Opening balance	12,026	571	600	13,197
Additions	2,254		49	2,303
Closing Balance	14,280	571	649	15,500

Accumulated depreciation	Right-of-use - Land & Buildings	Right-of-use - Machinery & Equipments	Right-of-use - Other Tangible Fixed Assets	Total
	€ '000	€ '000	€ '000	€ '000
Opening balance	1,627	433	234	2,294
Additions	1,276	65	143	1,484
Closing Balance	2,903	498	377	3,778

Excluding the effect of the divestment, there were no further indications of an impairment needed on the Tangible fixed assets during and after the financial year, up to the date of these financial statements.

6.3 Financial fixed assets

	Investments in affiliated companies	Other receivables	Total
	€ '000	€ '000	€ '000
Net book value at 31 March 2022	1,965,704	703	1,966,407
Equity share in earnings of affiliated companies	1,073,603	-	1,073,603
Capital increase	3,030	-	3,030
Dividend received	(791,014)	-	(791,014)
Value adjustment through OCI	34,521	-	34,521
Movement in exchange reserves affiliates	(19,930)	-	(19,930)
Exchange differences	-	-	-
Deferred tax movement	-	424	424
Other		(9)	(9)
Net book value at 31 March 2023	2,265,913	1,118	2,267,031

Participating interests in which the Group has a controlling interest or in which the Group exercises significant influence are valued according to the net asset value method.

If the value of the participating interest under the net asset value method has become nil, this method is no longer applied, with the participating interest being valued at nil if the circumstances are unchanged.

The Company does not maintain a reserve equal to its share in the positive result from participating interests and in the direct capital appreciation since the first valuation according to the equity method (participating interests of which the cumulative result has not been positive since that first valuation are not taken into account).

At 31 March 2023, the Company's investments, directly and indirectly, comprise:

Name	Registered office	% Owned
Astellas Pharma Europe B.V.	Leiden, The Netherlands	100
Astellas Pharma International B.V.	Leiden, The Netherlands	100
Astellas Pharma B.V.	Leiden, The Netherlands	100
Astellas Pharma B.V. (branch)	Brussels, Belgium
Astellas Pharma GmbH	Munich, Germany	100
Astellas Deutschland GmbH	Munich, Germany	100
Astellas Pharma Europe Ltd.	Addlestone, United Kingdom	100
Astellas Pharma Europe Ltd (branch).	Leiden, The Netherlands
Astellas Pharma Ltd.	Addlestone, United Kingdom	100
Astellas Pharma DMCC	Dubai, United Arab Emirates	100
Astellas Ireland Co., Ltd	Dublin, Ireland	100
Astellas Pharma Co., Ltd	Dublin, Ireland	100
Astellas Pharma A.G.	Wallisellen, Switzerland	100
Astellas Pharma S.A.S.	Paris, France	100
Astellas Pharma S.p.A.	Carugate, Milan, Italy	100
Astellas Pharma S.A.	Madrid, Spain	100
Astellas Pharma Limitada	Paço de Arcos, Portugal	100
Astellas Pharma AB	Gothenburg, Sweden	100
Astellas Pharma A/S	Glostrup, Denmark	100
Astellas Pharma A/S (branch)	Asker, Norway
Astellas Pharma Ges.mbH	Vienna, Austria	100
Astellas Pharma s.r.o	Prague, Czech Republic	100
Astellas Pharma Kft	Budapest, Hungary	100
Astellas Pharma Sp.zo.o.	Warsaw, Poland	100
Astellas Pharma Production LLC	Moscow, Russia	100
Astellas Pharma LLP	Almaty, Kazakhstan	100
Astellas Pharma Pty. Ltd.	Johannesburg, South Africa	100
Astellas Pharma AEBE	Metamorfosi, Greece	100
Astellas Pharma Ilaç Ticaret ve Sanayi
Anonim Șirketi	Istanbul, Turkey	100
Astellas Pharma EOOD	Sofia, Bulgaria	100
Astellas Pharma s.r.l.	Bucharest, Romania	100
Astellas d.o.o.	Zagreb, Croatia	100
Astellas Pharma d.o.o.	Ljubljana, Slovenia	100
Astellas Pharma L.L.C.	Kiev, Ukraine	100
Nanna Therapeutics Ltd	Addlestone, United Kingdom	100

Compared to FY2022/2023 there have been no acquisitions and no liquidations.

6.4 Receivables

	31 March 2023	31 March 2022
	€ '000	€ '000
Amounts due from affiliated companies	398,062	761,783
Amounts due from shareholder	1,374,023	1,262,641
Tax receivable	8,715	32,787
Other receivables and prepayments	5,164	2,976
	1,785,964	2,060,187

The movement in the amounts due from affiliated companies is explained by the movement in the cashpool positions with these affiliates. The increase in amounts due from shareholder is partially explained by the higher receivables in relation to Zolbetuximab inventories. The decrease in the tax receivable is explained by settlement of prior year tax returns. All amounts are due and receivable within one year.

6.5 Cash at banks and in hand

Total amount of Cash at banks and in hand as at 31 March 2023 is € 198.3 million (2022: € 219.4 million).

As at 31 March 2023, there were no deposits with an original maturity date of less than 90 days and that were withdrawable on demand (2022: € 0 million).

As at 31 March 2023, there were no time deposits with an original maturity date of more than 90 days (2022: € 0 million).

6.6 Shareholders' equity

	31 March 2023	31 March 2022
	€ '000	€ '000
Share capital	6,116	6,116
Share premium	526	526
Translation reserve	(5,094)	14,836
Retained earnings	1,087,932	1,132,966
Result	1,067,853	1,020,446
	2,157,333	2,174,890

	Share capital	Share premium	Translation reserve
	€ '000	€ '000	€ '000
Net book value at 31 March 2021	6,116	526	16,877
Allocation of result prior year	-	-	-
FX translation patricipations	-	-	(2,041)
Actuarial remeasurements in equity of affiliates	-	-	-
Dividend	-	-	-
Result for the year	-	-	-
Net book value at 31 March 2022	6,116	526	14.836
Allocation of result prior year	-	-	-
FX translation patricipations	-	-	(19,930)
Actuarial remeasurements in equity of affiliates	-	-	-
Dividend	-	-	-
Result for the year	-	-	-
Net book value at 31 March 2023	6,116	526	(5,094)

	Retained earnings	Result	Total
	€ '000	€'000	€'000
Net book value at 31 March 2021	953,197	1,118,809	2,095,526
Allocation of result prior year	1,118,809	(1,118,809)	-
FX translation patricipations	-	-	(2,041)
Actuarial remeasurements in equity of affiliates	10,960	-	10,960
Dividend	(950,000)	-	(950,000)
Result for the year	-	1,020,446	1,020,446
Net book value at 31 March 2022	1.132.966	1.020.446	2,174,890
Allocation of result prior year	1,020,446	(1,020,446)	-
FX translation patricipations	-	-	(19,930)
Actuarial remeasurements in equity of affiliates	34,520	-	34,520
Dividend	(1,100,000)	-	(1,100,000)
Result for the year	-	1,067,853	1,067,853
Net book value at 31 March 2023	1,087,932	1,067,853	2,157,333

In FY2022/2023, dividend payments totalling € 1,100 million have been made to the Japanese parent company.

Share capital

The authorised share capital, consisting of 30.0 million ordinary shares with a par value of € 1 each, amounts to € 30.0 million.

No paid-up and called-up share capital qualifies as partly paid-up share capital for tax purposes.

Share premium

No amount of the share premium qualifies as partly paid-up share capital for tax purposes.

Translation Reserve

The cumulative currency translation reserve includes all exchange differences resulting from the translation of the financial statements of foreign entities.

Statutory Reserve

The Company does not have any statutory reserve as at the balance sheet date.

Proposed appropriation of profit for 2023

The result for the year FY2021/2022 has been added to the retained earnings. The directors propose to add the result for FY2022/2023 of € 1,067.9 million to the retained earnings.

Please note that in the Board of Directors meeting of May 30, 2023 it was decided to pay an interim dividend to the Parent Company of € 800 million over the financial year FY2022/2023.

6.7 Long Term liabilities

	31 March 2023	31 March 2022
	€ '000	€ '000
Non-Pension employment liabilities	845	1,020
Lease Liabilities	13,741	13,742
Other Long Term liabilities	1,631	1,740
	16,217	16,502

The contractual maturity of the non-current lease liabilities is as follows:

Due within one year	€ 2.0 million
Due between one and 5 years	€ 8.1 million
Due after five years	€ 3.6 million

The Non-Pension employment liabilities and the other Long-Term liabilities are not expected to be settled within 5 years.

6.8 Current liabilities

	31 March 2023	31 March 2022
	€ '000	€ '000
Trade creditors	2,172	1,788
Lease liabilities	1,630	1,334
Amounts due to shareholder	-	-
Amounts due to affiliated companies	2,084,348	2,071,834
Other payable and accruals	3,331	3,668
	2,091,481	2,078,624

All current liabilities fall due in less than one year.

6.9 Commitments and Contingencies

Bank guarantees

Astellas B.V. has bank guarantees outstanding of € 16.1 million (2022: € 9.4 million), mainly in relation with health insurance funds, customs, Tax Authorities and rental agreements.

Guarantees

As a holding company for Astellas Ireland Co. Ltd and for the purposes of the exemption referred to in section 357(1) of the Companies Act 2014 (the "Act"), and not otherwise, on June 19, 2023 Astellas B.V. has irrevocably guaranteed in respect of the whole of the financial year of Astellas Ireland Co. Limited ended on 31 March 2023, all of the liabilities of Astellas Ireland Co. Limited referred to in section 357(1)(b) of the Act; provided that this guarantee shall not extend to any liability or commitment of Astellas Ireland Co. Limited which shall not have arisen otherwise than in respect of that financial year or which shall not constitute a liability within the meaning of section 357(1)(b) aforesaid.

As a holding company for Astellas Pharma Co. Ltd and for the purposes of the exemption referred to in section 357(1) of the Companies Act 2014 (the "Act"), and not otherwise, on June 19, 2023 Astellas B.V. has irrevocably guaranteed all amounts shown as liabilities in the statutory financial statements of Astellas Pharma Co. Limited ended on 31 March 2023 all amounts shown as liabilities in the statutory financial statements of Astellas Pharma Co. Limited in respect of that financial year; provided that this guarantee shall not extend to any liability or commitment of Astellas Pharma Co. Limited which shall arise or may have arisen otherwise than in respect of that financial year or which does not constitute a liability within the meaning of section 357(1 )(b) of the Act.

The Company has not recorded a provision in accordance with Dutch GAAP RJ252.424 and RJ252.425.

Under the provisions of Article 403, Part 9 of the Netherlands Civil Code, Book 2, the Company is wholly and severally liable for the liabilities and commitments of subsidiaries incorporated in the Netherlands, which are listed under note 6.3. Accordingly, the financial statements of these subsidiaries are not separately filed with the Chamber of Commerce.

Letters of Support

As a holding company for Astellas Pharma Europe Ltd and for the provision of financial support, the Company has issued a parental support letter on 16 June 2023 to Astellas Pharma Europe Ltd in which the Company has confirmed to consider the recoverability if the intercompany receivable balances in case the counterparties are not able to pay these amounts.

The financial support is provided for future performances, specifically the 12 months period after the date of approval of the statutory accounts of Astellas Pharma Europe Ltd for the year ended 31 March 2023.

As a holding company for Astellas Pharma Ltd and for the provision of financial support, the Company has issued a parental support letter on 16 June 2023 to Astellas Pharma Ltd in which the Company has confirmed to consider the recoverability if the intercompany receivable balances in case the counterparties are not able to pay these amounts.

The financial support is provided for future performances, specifically the 12 months period after the date of approval of the statutory accounts of Astellas Pharma Ltd for the year ended 31 March 2023.

The Company has not recorded a provision in accordance with Dutch GAAP RJ252.424 and RJ252.425.

Dutch Corporate Income Tax

Under the fiscal unit conditions, each of the participating Dutch affiliated companies is wholly and severally liable for Dutch corporate income tax liabilities of the fiscal unit.

As per 01 April 2021, the branch office of Astellas Pharma Europe Ltd (UK) located in The Netherlands, is included in the Dutch Fiscal Unity. This only applies for Corporate Income Tax. For VAT, the branch office is not included in the Dutch Fiscal Unity.

As the branch office of Astellas Pharma Europe Ltd is part of the Dutch Fiscal Unity, this legal entity is indirectly liable for Dutch corporate income tax as well.

Events after the balance sheet date for the company only financial statements

For the events after the balance sheet date for the Group, we refer to page 71.

Sale of manufacturing plant

On May 25, 2023 Astellas announced to have made an intended decision to sell and transfer its manufacturing plant, located in Meppel, the Netherlands (the "Business"), to Delpharm Industrie SAS. Following the completing works council consultation and local legal and regulatory requirements, the divestment agreement was signed on 08 August 2023.

Upon the transfer of the Business to Delpharm, the plan is that Delpharm will continue to manufacture the products that are currently manufactured at the plant in Meppel and will deliver these products to Astellas group to ensure the stable supply of products for patients. This collaboration between Delpharm and Astellas will allow Astellas to utilize a high-quality and efficient outsourced manufacturing system in Meppel. As part of the sale and transfer of the Business, the employees will also transfer to Delpharm.

Consequently, to the sale of the operation an assessment has been made on the recoverability of the carrying value of the business assets. The result of assessment is that an impairment charge of € 10.5 million has been recognised and treated as post balance sheet adjusting event.

Dividends

By Board resolution dated May 30, 2023 it was decided to pay an interim dividend to the Parent Company of € 800 million.

Capital Commitment in Venture Capital Fund

Astellas entered into a capital commitment with a Venture Capital Fund as per 13 July 2023. The company will contribute up to a maximum amount of € 50 million, with a maximum amount of € 5 million per year. The investment in the Venture Capital Fund gives the company broader and deeper insights in European market and deal flow in the field of Rx+, while minimizing resource and financial risks. This commitment is assessed as a post balance sheet non-adjusting event.

Leiden, 30 August 2023

The Board of Directors:

Mrs. M. Dempsey

Mr. K. Shiga

Mrs. J. Nelissen

Mr. S. Schutte

Mr. K. Osawa

OTHER INFORMATION

Statutory appropriation of profits

Article 11 of the Company's Articles of Incorporation provides that any profits that arise shall be at the disposal at the General Meeting of Shareholders.

Auditors' report

The auditors' report is set forth on the following pages.

Independent auditor's report

To: the shareholder of Astellas B.V.

Report on the audit of the financial statements for the year ended 31 March 2023 included in the annual report

Our opinion

We have audited the financial statements for the year ended 31 March 2023 of Astellas B.V., based in Leiden, the Netherlands.

In our opinion, the accompanying financial statements give a true and fair view of the financial position of Astellas B.V. as at 31 March 2023 and of its result for the year then ended in accordance with Part 9 of Book 2 of the Dutch Civil Code.

The financial statements comprise:

―	The consolidated and company balance sheet as at 31 March 2023
―	The consolidated and company profit and loss account for the year ended 31 March 2023
―	The notes comprising a summary of the accounting policies and other explanatory information

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the Our responsibilities for the audit of the financial statements section of our report.

We are independent of Astellas B.V. in accordance with the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), the Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Information in support of our opinion

We designed our audit procedures in the context of our audit of the financial statements as a whole and in forming our opinion thereon. The following information in support of our opinion and any findings were addressed in this context, and we do not provide a separate opinion or conclusion on these matters.

Our focus on fraud and non-compliance with laws and regulations

Our responsibility

Although we are not responsible for preventing fraud or non-compliance and we cannot be expected to detect non-compliance with all laws and regulations, it is our responsibility to obtain reasonable assurance that the financial statements, taken as a whole, are free from material misstatement, whether caused by fraud or error.

Our audit response related to fraud risks

We identified and assessed the risks of material misstatements of the financial statements due to fraud. During our audit we obtained an understanding of Astellas B.V. and its environment and the components of the system of internal control, including the risk assessment process and management's process for responding to the risks of fraud and monitoring the system of internal control, as well as the outcomes.

We refer to section Critical Risks of the director's report for management's (fraud) risk assessment, after consideration of potential fraud risks.

We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk assessment, as well as the Astellas Group code of conduct, whistle blower procedures (Speak-up) and incident registration. We evaluated the design and the implementation of internal controls designed to mitigate fraud risks.

As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to financial reporting fraud, misappropriation of assets and bribery and corruption, in particular relating to doing business in certain higher risk countries in close cooperation with our forensic specialists. We evaluated whether these factors indicate that a risk of material misstatement due to fraud is present.

We incorporated elements of unpredictability in our audit. We also considered the outcome of our other audit procedures and evaluated whether any findings were indicative of fraud or non-compliance.

As in all of our audits, we addressed the risks related to management override of controls. For these risks we have performed procedures among others to evaluate key accounting estimates for management bias that may represent a risk of material misstatement due to fraud, in particular relating to important judgment areas and significant accounting estimates as disclosed in Note 1.5 "Estimates and Judgements" to the consolidated financial statements. We have also used data analysis to identify and address high-risk journal entries and evaluated the business rationale (or the lack thereof) of significant extraordinary transactions, including those with related parties and whether these were accounted for at arm's length and in accordance with transfer pricing documentation.

Additionally, in order to respond to the identified risks of management override of controls, we applied lower testing thresholds when performing our substantive procedures for adjustments made during the consolidation process that did not pass through the usual transaction processing systems and were not subject to the same internal controls to which other financial information is subject.

When identifying and assessing fraud risks we presumed that there are risks of fraud in revenue recognition. We designed and performed our audit procedures relating to revenue recognition responsive to this presumed fraud risk.

These risks did however not require significant auditor's attention during our audit.

We considered available information and made enquiries of relevant executives, directors, internal audit, legal, compliance, human resources and regional directors.

The fraud risks we identified, enquiries and other available information did not lead to specific indications for fraud or suspected fraud potentially materially impacting the view of the financial statements.

Our audit response related to risks of non-compliance with laws and regulations

We performed appropriate audit procedures regarding compliance with the provisions of those laws and regulations that have a direct effect on the determination of material amounts and disclosures in the financial statements. Furthermore, we assessed factors related to the risks of non-compliance with laws and regulations that could reasonably be expected to have a material effect on the financial statements from our general industry experience, through discussions with the board of directors, reading minutes, inspection of internal audit and compliance reports and performing substantive tests of details of classes of transactions, account balances or disclosures.

We have been informed by management that there was no correspondence with regulatory authorities relating to non-compliance with laws and regulations and remained alert to any indication of (suspected) non-compliance throughout the audit, in particular relating to sanctions. Finally we obtained written representations that all known instances of non-compliance with laws and regulations have been disclosed to us.

Our audit response related to going concern

As disclosed in Section 1.3 Going Concern of the notes to the consolidated financial statements, the financial statements have been prepared on a going concern basis. When preparing the financial statements, the board of directors made a specific assessment of Astellas B.V.'s ability to continue as a going concern and to continue its operations for the foreseeable future.

We discussed and evaluated the specific assessment with management exercising professional judgment and maintaining professional skepticism. We considered whether management's going concern assessment, based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, contains all relevant events or conditions that may cast significant doubt on the Astellas B.V.'s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are reguired to draw attention in our auditor's report to the related disclosures in the financial statements or, if such disclosures are inadeguate, to modify our opinion.

Based on our procedures performed, we did not identify material uncertainties about going concern. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause a Astellas B.V. to cease to continue as a going concern.

Report on other information included in the annual report

The annual report contains other information in addition to the financial statements and our auditor's report thereon.

Based on the following procedures performed, we conclude that the other information:

―	Is consistent with the financial statements and does not contain material misstatements
―	Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and the other information as required by Part 9 of Book 2 of the Dutch Civil Code

We have read the other information. Based on our knowledge and understanding obtained through our audit of the financial statements or otherwise, we have considered whether the other information contains material misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 of the Dutch Civil Code and the Dutch Standard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the financial statements.

The board of directors is responsible for the preparation of the other information, including the management report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information required by Part 9 of Book 2 of the Dutch Civil Code.

Description of responsibilities regarding the financial statements

Responsibilities of the board of directors for the financial statements

The board of directors is responsible for the preparation and fair presentation of the financial statements in accordance with Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the board of directors is responsible for such internal control as management determines is necessary to enable the preparation of the financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the financial statements, the board of directors is responsible for assessing the Astellas B.V.'s ability to continue as a going concern. Based on the financial reporting framework mentioned, the board of directors should prepare the financial statements using the going concern basis of accounting unless the shareholder either intends to liguidate the Astellas B.V. or to cease operations, or has no realistic alternative but to do so. The board of directors should disclose events and circumstances that may cast significant doubt on the Astellas B.V.'s ability to continue as a going concern in the financial statements.

Our responsibilities for the audit of the financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. The Information in support of our opinion section above includes an informative summary of our responsibilities and the work performed as the basis for our opinion.

Our audit included among others:

―	Identifying and assessing the risks of material misstatement of the financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control
―	Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Astellas B.V.'s internal control
―	Evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management
―	Evaluating the overall presentation, structure and content of the financial statements, including the disclosures
―	Evaluating whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.

Communication

We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit.

Amsterdam, 30 August 2023

Ernst & Young Accountants LLP

signed by J. Verhagen